Correlation Between ALPSSmith Credit and DoubleLine ETF

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

By analyzing existing cross correlation between ALPSSmith Credit Opportunities and DoubleLine ETF Trust, you can compare the effects of market volatilities on ALPSSmith Credit and DoubleLine ETF 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 ALPSSmith Credit with a short position of DoubleLine ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALPSSmith Credit and DoubleLine ETF.

Diversification Opportunities for ALPSSmith Credit and DoubleLine ETF

0.91

Correlation Coefficient

ALPSSmith Credit  DoubleLine ETF

Almost no diversification

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

Pair Corralation between ALPSSmith Credit and DoubleLine ETF

Assuming the 90 days horizon ALPSSmith Credit Opportunities is expected to generate 1.22 times more return on investment than DoubleLine ETF. However, ALPSSmith Credit is 1.22 times more volatile than DoubleLine ETF Trust. It trades about 0.18 of its potential returns per unit of risk. DoubleLine ETF Trust is currently generating about 0.12 per unit of risk. If you would invest  899.00  in ALPSSmith Credit Opportunities on December 24, 2024 and sell it today you would earn a total of  17.00  from holding ALPSSmith Credit Opportunities or generate 1.89% return on investment over 90 days.

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

ALPSSmith Credit Opportunities  vs.  DoubleLine ETF Trust

ALPSSmith Credit Opp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALPSSmith Credit Opportunities are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, ALPSSmith Credit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DoubleLine ETF Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleLine ETF Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, DoubleLine ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ALPSSmith Credit and DoubleLine ETF

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

The idea behind ALPSSmith Credit Opportunities and DoubleLine ETF Trust 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.