Correlation Between Ab Value and Doubleline Emerging

Can any of the company-specific risk be diversified away by investing in both Ab Value and Doubleline Emerging 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 Ab Value and Doubleline Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Value Fund and Doubleline Emerging Markets, you can compare the effects of market volatilities on Ab Value and Doubleline Emerging 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 Ab Value with a short position of Doubleline Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Doubleline Emerging.

Diversification Opportunities for Ab Value and Doubleline Emerging

0.03

Correlation Coefficient

Ab Value  Doubleline Emerging

Significant diversification

The 3 months correlation between ABVCX and Doubleline is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Doubleline Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Emerging and Ab Value 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 Ab Value Fund are associated (or correlated) with Doubleline Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Emerging has no effect on the direction of Ab Value i.e., Ab Value and Doubleline Emerging go up and down completely randomly.

Pair Corralation between Ab Value and Doubleline Emerging

Assuming the 90 days horizon Ab Value is expected to generate 38.56 times less return on investment than Doubleline Emerging. In addition to that, Ab Value is 2.1 times more volatile than Doubleline Emerging Markets. It trades about 0.0 of its total potential returns per unit of risk. Doubleline Emerging Markets is currently generating about 0.15 per unit of volatility. If you would invest  831.00  in Doubleline Emerging Markets on December 30, 2024 and sell it today you would earn a total of  32.00  from holding Doubleline Emerging Markets or generate 3.85% return on investment over 90 days.

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

Ab Value Fund  vs.  Doubleline Emerging Markets

Ab Value Fund

Risk-Adjusted Performance

Very Weak

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

Doubleline Emerging

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Emerging Markets are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Doubleline Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Value and Doubleline Emerging

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

The idea behind Ab Value Fund and Doubleline Emerging Markets 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.