Correlation Between Doubleline Low and Doubleline Long

Can any of the company-specific risk be diversified away by investing in both Doubleline Low 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 Low 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 Low Duration and Doubleline Long Duration, you can compare the effects of market volatilities on Doubleline Low 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 Low with a short position of Doubleline Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Low and Doubleline Long.

Diversification Opportunities for Doubleline Low and Doubleline Long

-0.63

Correlation Coefficient

Doubleline Low  Doubleline Long

Excellent diversification

The 3 months correlation between Doubleline and Doubleline is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Low Duration 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 Low 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 Low Duration 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 Low i.e., Doubleline Low and Doubleline Long go up and down completely randomly.

Pair Corralation between Doubleline Low and Doubleline Long

Assuming the 90 days horizon Doubleline Low is expected to generate 12.44 times less return on investment than Doubleline Long. But when comparing it to its historical volatility, Doubleline Low Duration is 11.63 times less risky than Doubleline Long. It trades about 0.06 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Doubleline Low Duration  vs.  Doubleline Long Duration

Doubleline Low Duration

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Low Duration are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Doubleline Low 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 Low and Doubleline Long

The main advantage of trading using opposite Doubleline Low and Doubleline Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Low 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 Low Duration 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.

Check out your portfolio center.

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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.