Correlation Between Visa and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Angel Oak Flexible, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Angel Oak.
Diversification Opportunities for Visa and Angel Oak
Good diversification
The 3 months correlation between Visa and Angel is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Angel Oak Flexible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Flexible and Visa 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 Visa Class A 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 Flexible has no effect on the direction of Visa i.e., Visa and Angel Oak go up and down completely randomly.
Pair Corralation between Visa and Angel Oak
Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the Angel Oak. In addition to that, Visa is 5.5 times more volatile than Angel Oak Flexible. It trades about -0.1 of its total potential returns per unit of risk. Angel Oak Flexible is currently generating about -0.14 per unit of volatility. If you would invest 776.00 in Angel Oak Flexible on January 27, 2024 and sell it today you would lose (3.00) from holding Angel Oak Flexible or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Angel Oak Flexible
Performance |
| Timeline |
| Visa Class A |
| Angel Oak Flexible |
Visa and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Angel Oak
The main advantage of trading using opposite Visa and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
| Angel Oak vs. Ab Bond Inflation | Angel Oak vs. Alliancebernstein National Municipal | Angel Oak vs. Transamerica Intermediate Muni | Angel Oak vs. Artisan High Income |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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