Correlation Between Doubleline Emerging and The Gabelli

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

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

Diversification Opportunities for Doubleline Emerging and The Gabelli

-0.38

Correlation Coefficient

Doubleline Emerging  The Gabelli

Very good diversification

The 3 months correlation between Doubleline and THE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Emerging Markets and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and Doubleline Emerging 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 Doubleline Emerging Markets are associated (or correlated) with The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Doubleline Emerging i.e., Doubleline Emerging and The Gabelli go up and down completely randomly.

Pair Corralation between Doubleline Emerging and The Gabelli

Assuming the 90 days horizon Doubleline Emerging is expected to generate 1.57 times less return on investment than The Gabelli. But when comparing it to its historical volatility, Doubleline Emerging Markets is 1.8 times less risky than The Gabelli. It trades about 0.05 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  547.00  in The Gabelli Equity on September 1, 2024 and sell it today you would earn a total of  99.00  from holding The Gabelli Equity or generate 18.1% return on investment over 90 days.

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

Doubleline Emerging Markets  vs.  The Gabelli Equity

Doubleline Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubleline Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. 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.

Gabelli Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, The Gabelli is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Doubleline Emerging and The Gabelli

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

The idea behind Doubleline Emerging Markets and The Gabelli 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.