Correlation Between The Gabelli and Angel Oak

Can any of the company-specific risk be diversified away by investing in both The Gabelli and Angel Oak 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 The Gabelli and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Gabelli Small and Angel Oak Multi Strategy, you can compare the effects of market volatilities on The Gabelli and Angel Oak 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 The Gabelli with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gabelli and Angel Oak.

Diversification Opportunities for The Gabelli and Angel Oak

0.25

Correlation Coefficient

The Gabelli  Angel Oak

Modest diversification

The 3 months correlation between The and Angel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Small and Angel Oak Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Multi and The Gabelli 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 The Gabelli Small are associated (or correlated) with Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Multi has no effect on the direction of The Gabelli i.e., The Gabelli and Angel Oak go up and down completely randomly.

Pair Corralation between The Gabelli and Angel Oak

Assuming the 90 days horizon The Gabelli Small is expected to under-perform the Angel Oak. In addition to that, The Gabelli is 8.86 times more volatile than Angel Oak Multi Strategy. It trades about -0.03 of its total potential returns per unit of risk. Angel Oak Multi Strategy is currently generating about -0.02 per unit of volatility. If you would invest  863.00  in Angel Oak Multi Strategy on October 6, 2024 and sell it today you would lose (1.00) from holding Angel Oak Multi Strategy or give up 0.12% of portfolio value over 90 days.

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

The Gabelli Small  vs.  Angel Oak Multi Strategy

Gabelli Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Angel Oak Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angel Oak Multi Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Angel Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with The Gabelli and Angel Oak

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

The idea behind The Gabelli Small and Angel Oak Multi Strategy 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.