Correlation Between Doubleline Core and Doubleline Long

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

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

Diversification Opportunities for Doubleline Core and Doubleline Long

0.97

Correlation Coefficient

Doubleline Core  Doubleline Long

Almost no diversification

The 3 months correlation between Doubleline and Doubleline is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Core Fixed and Doubleline Long Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Long Duration and Doubleline Core 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 Core Fixed are associated (or correlated) with Doubleline Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Long Duration has no effect on the direction of Doubleline Core i.e., Doubleline Core and Doubleline Long go up and down completely randomly.

Pair Corralation between Doubleline Core and Doubleline Long

Assuming the 90 days horizon Doubleline Core is expected to generate 1.99 times less return on investment than Doubleline Long. But when comparing it to its historical volatility, Doubleline Core Fixed is 2.63 times less risky than Doubleline Long. It trades about 0.09 of its potential returns per unit of risk. Doubleline Long Duration is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  645.00  in Doubleline Long Duration on August 31, 2024 and sell it today you would earn a total of  8.00  from holding Doubleline Long Duration or generate 1.24% return on investment over 90 days.

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

Doubleline Core Fixed  vs.  Doubleline Long Duration

Doubleline Core Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Doubleline Long Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubleline Long Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Doubleline Long 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 Core and Doubleline Long

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

The idea behind Doubleline Core Fixed and Doubleline Long Duration 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.