Correlation Between Angel Oak and Guggenheim World

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

Diversification Opportunities for Angel Oak and Guggenheim World

-0.4

Correlation Coefficient

Angel Oak  Guggenheim World

Very good diversification

The 3 months correlation between Angel and Guggenheim is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Guggenheim World Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim World Equity 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 Guggenheim World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim World Equity has no effect on the direction of Angel Oak i.e., Angel Oak and Guggenheim World go up and down completely randomly.

Pair Corralation between Angel Oak and Guggenheim World

Assuming the 90 days horizon Angel Oak Multi Strategy is expected to under-perform the Guggenheim World. But the mutual fund apears to be less risky and, when comparing its historical volatility, Angel Oak Multi Strategy is 3.76 times less risky than Guggenheim World. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Guggenheim World Equity is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,695  in Guggenheim World Equity on September 5, 2024 and sell it today you would earn a total of  78.00  from holding Guggenheim World Equity or generate 4.6% return on investment over 90 days.

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

Angel Oak Multi Strategy  vs.  Guggenheim World Equity

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.

Guggenheim World Equity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim World Equity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Guggenheim World is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Angel Oak and Guggenheim World

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

The idea behind Angel Oak Multi Strategy and Guggenheim World Equity 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 CEOs Directory module to screen CEOs from public companies around the world.