Correlation Between Doubleline Total and Baird Core

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

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

Diversification Opportunities for Doubleline Total and Baird Core

0.84

Correlation Coefficient

Doubleline Total  Baird Core

Very poor diversification

The 3 months correlation between Doubleline and Baird is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Total Return and Baird E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird E Plus and Doubleline Total 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 Total Return are associated (or correlated) with Baird Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird E Plus has no effect on the direction of Doubleline Total i.e., Doubleline Total and Baird Core go up and down completely randomly.

Pair Corralation between Doubleline Total and Baird Core

Assuming the 90 days horizon Doubleline Total Return is expected to generate 1.0 times more return on investment than Baird Core. However, Doubleline Total Return is 1.0 times less risky than Baird Core. It trades about 0.16 of its potential returns per unit of risk. Baird E Plus is currently generating about 0.11 per unit of risk. If you would invest  861.00  in Doubleline Total Return on December 29, 2024 and sell it today you would earn a total of  24.00  from holding Doubleline Total Return or generate 2.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Doubleline Total Return  vs.  Baird E Plus

Doubleline Total Return

Risk-Adjusted Performance

Good

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

Baird E Plus

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baird E Plus are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Baird Core 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 Total and Baird Core

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

The idea behind Doubleline Total Return and Baird E Plus 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.