Correlation Between Angel Oak and Gabelli Equity

Can any of the company-specific risk be diversified away by investing in both Angel Oak and Gabelli Equity at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Angel Oak and Gabelli Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Angel Oak Financial and The Gabelli Equity, you can compare the effects of market volatilities on Angel Oak and Gabelli Equity and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Angel Oak with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Gabelli Equity.

Diversification Opportunities for Angel Oak and Gabelli Equity

-0.27

Correlation Coefficient

Angel Oak  Gabelli Equity

Very good diversification

The 3 months correlation between Angel and Gabelli is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and Angel Oak is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Angel Oak Financial are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Angel Oak i.e., Angel Oak and Gabelli Equity go up and down completely randomly.

Pair Corralation between Angel Oak and Gabelli Equity

Given the investment horizon of 90 days Angel Oak Financial is expected to generate 1.16 times more return on investment than Gabelli Equity. However, Angel Oak is 1.16 times more volatile than The Gabelli Equity. It trades about 0.16 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.04 per unit of risk. If you would invest  1,267  in Angel Oak Financial on December 20, 2024 and sell it today you would earn a total of  70.00  from holding Angel Oak Financial or generate 5.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Angel Oak Financial  vs.  The Gabelli Equity

Angel Oak Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Angel Oak Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Angel Oak is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Gabelli Equity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Equity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Gabelli Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Angel Oak and Gabelli Equity

The main advantage of trading using opposite Angel Oak and Gabelli Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Gabelli Equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gabelli Equity will offset losses from the drop in Gabelli Equity's long position.

The idea behind Angel Oak Financial and The Gabelli Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.