Correlation Between Doubleline Flexible and PIMCO Active

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

By analyzing existing cross correlation between Doubleline Flexible Income and PIMCO Active Bond, you can compare the effects of market volatilities on Doubleline Flexible and PIMCO Active 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 Flexible with a short position of PIMCO Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Flexible and PIMCO Active.

Diversification Opportunities for Doubleline Flexible and PIMCO Active

0.91

Correlation Coefficient

Doubleline Flexible  PIMCO Active

Almost no diversification

The 3 months correlation between Doubleline and PIMCO is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Flexible Income and PIMCO Active Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Active Bond and Doubleline Flexible 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 Flexible Income are associated (or correlated) with PIMCO Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Active Bond has no effect on the direction of Doubleline Flexible i.e., Doubleline Flexible and PIMCO Active go up and down completely randomly.

Pair Corralation between Doubleline Flexible and PIMCO Active

Assuming the 90 days horizon Doubleline Flexible is expected to generate 1.9 times less return on investment than PIMCO Active. But when comparing it to its historical volatility, Doubleline Flexible Income is 3.95 times less risky than PIMCO Active. It trades about 0.34 of its potential returns per unit of risk. PIMCO Active Bond is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  8,935  in PIMCO Active Bond on December 22, 2024 and sell it today you would earn a total of  302.00  from holding PIMCO Active Bond or generate 3.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Doubleline Flexible Income  vs.  PIMCO Active Bond

Doubleline Flexible

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Flexible Income are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Doubleline Flexible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PIMCO Active Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Active Bond are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PIMCO Active is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Doubleline Flexible and PIMCO Active

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

The idea behind Doubleline Flexible Income and PIMCO Active Bond 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.