Correlation Between Angel Oak and Nationwide Fund6

Can any of the company-specific risk be diversified away by investing in both Angel Oak and Nationwide Fund6 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 Nationwide Fund6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Angel Oak Multi Strategy and Nationwide Fund6, you can compare the effects of market volatilities on Angel Oak and Nationwide Fund6 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 Nationwide Fund6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Nationwide Fund6.

Diversification Opportunities for Angel Oak and Nationwide Fund6

-0.64

Correlation Coefficient

Angel Oak  Nationwide Fund6

Excellent diversification

The 3 months correlation between Angel and Nationwide is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Nationwide Fund6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Fund6 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 Multi Strategy are associated (or correlated) with Nationwide Fund6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Fund6 has no effect on the direction of Angel Oak i.e., Angel Oak and Nationwide Fund6 go up and down completely randomly.

Pair Corralation between Angel Oak and Nationwide Fund6

Assuming the 90 days horizon Angel Oak Multi Strategy is expected to under-perform the Nationwide Fund6. But the mutual fund apears to be less risky and, when comparing its historical volatility, Angel Oak Multi Strategy is 5.73 times less risky than Nationwide Fund6. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Nationwide Fund6 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,202  in Nationwide Fund6 on September 4, 2024 and sell it today you would earn a total of  303.00  from holding Nationwide Fund6 or generate 9.46% return on investment over 90 days.

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

Angel Oak Multi Strategy  vs.  Nationwide Fund6

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 fundamental indicators, Angel Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nationwide Fund6

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Fund6 are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Nationwide Fund6 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Angel Oak and Nationwide Fund6

The main advantage of trading using opposite Angel Oak and Nationwide Fund6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Nationwide Fund6 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 Nationwide Fund6 will offset losses from the drop in Nationwide Fund6's long position.

The idea behind Angel Oak Multi Strategy and Nationwide Fund6 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.