Correlation Between Doubleline and Doubleline Long

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

By analyzing existing cross correlation between Doubleline E Fixed and Doubleline Long Duration, you can compare the effects of market volatilities on Doubleline and Doubleline Long 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 with a short position of Doubleline Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline and Doubleline Long.

Diversification Opportunities for Doubleline and Doubleline Long

0.98

Correlation Coefficient

Doubleline  Doubleline Long

Almost no diversification

The 3 months correlation between Doubleline and Doubleline is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline E Fixed and Doubleline Long Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Long Duration and Doubleline 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 E Fixed are associated (or correlated) with Doubleline Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Long Duration has no effect on the direction of Doubleline i.e., Doubleline and Doubleline Long go up and down completely randomly.

Pair Corralation between Doubleline and Doubleline Long

Assuming the 90 days horizon Doubleline E Fixed is expected to generate 0.38 times more return on investment than Doubleline Long. However, Doubleline E Fixed is 2.65 times less risky than Doubleline Long. It trades about -0.12 of its potential returns per unit of risk. Doubleline Long Duration is currently generating about -0.16 per unit of risk. If you would invest  947.00  in Doubleline E Fixed on September 13, 2024 and sell it today you would lose (19.00) from holding Doubleline E Fixed or give up 2.01% of portfolio value over 90 days.

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

Doubleline E Fixed  vs.  Doubleline Long Duration

Doubleline E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Doubleline Long Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubleline Long Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Doubleline and Doubleline Long

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

The idea behind Doubleline E Fixed and Doubleline Long Duration 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..