Correlation Between Doubleline Floating and Doubleline Income

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

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

Diversification Opportunities for Doubleline Floating and Doubleline Income

0.76

Correlation Coefficient

Doubleline Floating  Doubleline Income

Poor diversification

The 3 months correlation between Doubleline and Doubleline is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Floating Rate and Doubleline Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Income and Doubleline Floating 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 Floating Rate are associated (or correlated) with Doubleline Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Income has no effect on the direction of Doubleline Floating i.e., Doubleline Floating and Doubleline Income go up and down completely randomly.

Pair Corralation between Doubleline Floating and Doubleline Income

Assuming the 90 days horizon Doubleline Floating is expected to generate 1.14 times less return on investment than Doubleline Income. But when comparing it to its historical volatility, Doubleline Floating Rate is 2.4 times less risky than Doubleline Income. It trades about 0.37 of its potential returns per unit of risk. Doubleline Income is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  794.00  in Doubleline Income on September 26, 2024 and sell it today you would earn a total of  4.00  from holding Doubleline Income or generate 0.5% return on investment over 90 days.

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

Doubleline Floating Rate  vs.  Doubleline Income

Doubleline Floating Rate

Risk-Adjusted Performance

49 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Floating Rate are ranked lower than 49 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Doubleline Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Doubleline Income

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Doubleline Income 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 Floating and Doubleline Income

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

The idea behind Doubleline Floating Rate and Doubleline Income 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.