Correlation Between Angel Oak and Intermediate Bond
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Intermediate Bond 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 Intermediate Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Flexible and Intermediate Bond Fund, you can compare the effects of market volatilities on Angel Oak and Intermediate Bond 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 Intermediate Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Intermediate Bond.
Diversification Opportunities for Angel Oak and Intermediate Bond
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Intermediate is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Flexible and Intermediate Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Bond 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 Flexible are associated (or correlated) with Intermediate Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Bond has no effect on the direction of Angel Oak i.e., Angel Oak and Intermediate Bond go up and down completely randomly.
Pair Corralation between Angel Oak and Intermediate Bond
Assuming the 90 days horizon Angel Oak Flexible is expected to under-perform the Intermediate Bond. But the mutual fund apears to be less risky and, when comparing its historical volatility, Angel Oak Flexible is 1.47 times less risky than Intermediate Bond. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Intermediate Bond Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,216 in Intermediate Bond Fund on January 26, 2024 and sell it today you would earn a total of 8.00 from holding Intermediate Bond Fund or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Flexible vs. Intermediate Bond Fund
Performance |
| Timeline |
| Angel Oak Flexible |
| Intermediate Bond |
Angel Oak and Intermediate Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Intermediate Bond
The main advantage of trading using opposite Angel Oak and Intermediate Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Intermediate Bond 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 Intermediate Bond will offset losses from the drop in Intermediate Bond's long position.| Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Flexible | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy |
| Intermediate Bond vs. Vanguard Short Term Investment Grade | Intermediate Bond vs. Vanguard Short Term Bond |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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