Correlation Between Doubleline Yield and First Investors

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

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

Diversification Opportunities for Doubleline Yield and First Investors

-0.52

Correlation Coefficient

Doubleline Yield  First Investors

Excellent diversification

The 3 months correlation between Doubleline and First is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Yield Opportunities and First Investors Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Oppo and Doubleline Yield 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 Yield Opportunities are associated (or correlated) with First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Oppo has no effect on the direction of Doubleline Yield i.e., Doubleline Yield and First Investors go up and down completely randomly.

Pair Corralation between Doubleline Yield and First Investors

Assuming the 90 days horizon Doubleline Yield Opportunities is expected to under-perform the First Investors. But the mutual fund apears to be less risky and, when comparing its historical volatility, Doubleline Yield Opportunities is 3.94 times less risky than First Investors. The mutual fund trades about -0.04 of its potential returns per unit of risk. The First Investors Opportunity is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,735  in First Investors Opportunity on September 13, 2024 and sell it today you would earn a total of  249.00  from holding First Investors Opportunity or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Doubleline Yield Opportunities  vs.  First Investors Opportunity

Doubleline Yield Opp

Risk-Adjusted Performance

0 of 100

Very Weak

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

First Investors Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Investors Opportunity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Investors may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Doubleline Yield and First Investors

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

The idea behind Doubleline Yield Opportunities and First Investors Opportunity 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.