Correlation Between Angel Oak and Voya Emerging

Can any of the company-specific risk be diversified away by investing in both Angel Oak and Voya Emerging 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 Voya Emerging 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 Voya Emerging Markets, you can compare the effects of market volatilities on Angel Oak and Voya Emerging 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 Voya Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Voya Emerging.

Diversification Opportunities for Angel Oak and Voya Emerging

0.55

Correlation Coefficient

Angel Oak  Voya Emerging

Very weak diversification

The 3 months correlation between Angel and Voya is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Voya Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Emerging Markets 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 Voya Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Emerging Markets has no effect on the direction of Angel Oak i.e., Angel Oak and Voya Emerging go up and down completely randomly.

Pair Corralation between Angel Oak and Voya Emerging

Given the investment horizon of 90 days Angel Oak Financial is expected to generate 0.5 times more return on investment than Voya Emerging. However, Angel Oak Financial is 1.98 times less risky than Voya Emerging. It trades about 0.15 of its potential returns per unit of risk. Voya Emerging Markets is currently generating about 0.06 per unit of risk. If you would invest  1,092  in Angel Oak Financial on October 10, 2024 and sell it today you would earn a total of  208.00  from holding Angel Oak Financial or generate 19.05% return on investment over 90 days.

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

Angel Oak Financial  vs.  Voya Emerging Markets

Angel Oak Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angel Oak Financial has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Voya Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical indicators, Voya Emerging is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Angel Oak and Voya Emerging

The main advantage of trading using opposite Angel Oak and Voya Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Voya Emerging 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 Voya Emerging will offset losses from the drop in Voya Emerging's long position.

The idea behind Angel Oak Financial and Voya Emerging Markets 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.