Correlation Between SPDR DoubleLine and Vident Core

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

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

Diversification Opportunities for SPDR DoubleLine and Vident Core

0.99

Correlation Coefficient

SPDR DoubleLine  Vident Core

No risk reduction

The 3 months correlation between SPDR and Vident is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Total and Vident Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vident Core Bond and SPDR 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 SPDR DoubleLine Total are associated (or correlated) with Vident Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vident Core Bond has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and Vident Core go up and down completely randomly.

Pair Corralation between SPDR DoubleLine and Vident Core

Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 1.05 times less return on investment than Vident Core. In addition to that, SPDR DoubleLine is 1.09 times more volatile than Vident Core Bond. It trades about 0.07 of its total potential returns per unit of risk. Vident Core Bond is currently generating about 0.08 per unit of volatility. If you would invest  3,985  in Vident Core Bond on September 12, 2024 and sell it today you would earn a total of  416.00  from holding Vident Core Bond or generate 10.44% return on investment over 90 days.

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

SPDR DoubleLine Total  vs.  Vident Core Bond

SPDR DoubleLine Total

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR DoubleLine Total has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SPDR DoubleLine is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Vident Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vident Core Bond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vident Core is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR DoubleLine and Vident Core

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

The idea behind SPDR DoubleLine Total and Vident Core 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 Commodity Directory module to find actively traded commodities issued by global exchanges.