Correlation Between Angel Oak and Doubleline Income

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

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

Diversification Opportunities for Angel Oak and Doubleline Income

0.5

Correlation Coefficient

Angel Oak  Doubleline Income

Very weak diversification

The 3 months correlation between Angel and Doubleline is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Doubleline Income Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Income and Angel Oak 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 Angel Oak Multi Strategy 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 Angel Oak i.e., Angel Oak and Doubleline Income go up and down completely randomly.

Pair Corralation between Angel Oak and Doubleline Income

Assuming the 90 days horizon Angel Oak Multi Strategy is expected to under-perform the Doubleline Income. But the mutual fund apears to be less risky and, when comparing its historical volatility, Angel Oak Multi Strategy is 5.65 times less risky than Doubleline Income. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Doubleline Income Solutions is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,254  in Doubleline Income Solutions on September 26, 2024 and sell it today you would earn a total of  5.00  from holding Doubleline Income Solutions or generate 0.4% return on investment over 90 days.

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

Angel Oak Multi Strategy  vs.  Doubleline Income Solutions

Angel Oak Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angel Oak Multi Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Angel Oak 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

0 of 100

Very Weak

Over the last 90 days Doubleline Income Solutions has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Doubleline Income is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Angel Oak and Doubleline Income

The main advantage of trading using opposite Angel Oak and Doubleline Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak 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 Angel Oak Multi Strategy and Doubleline Income Solutions 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.