Correlation Between Doubleline Shiller and Doubleline Low

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

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

Diversification Opportunities for Doubleline Shiller and Doubleline Low

0.22

Correlation Coefficient

Doubleline Shiller  Doubleline Low

Modest diversification

The 3 months correlation between Doubleline and Doubleline is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Shiller Enhanced and Doubleline Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Low Duration and Doubleline Shiller 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 Shiller Enhanced are associated (or correlated) with Doubleline Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Low Duration has no effect on the direction of Doubleline Shiller i.e., Doubleline Shiller and Doubleline Low go up and down completely randomly.

Pair Corralation between Doubleline Shiller and Doubleline Low

Assuming the 90 days horizon Doubleline Shiller Enhanced is expected to generate 9.18 times more return on investment than Doubleline Low. However, Doubleline Shiller is 9.18 times more volatile than Doubleline Low Duration. It trades about 0.16 of its potential returns per unit of risk. Doubleline Low Duration is currently generating about 0.24 per unit of risk. If you would invest  1,416  in Doubleline Shiller Enhanced on September 3, 2024 and sell it today you would earn a total of  223.00  from holding Doubleline Shiller Enhanced or generate 15.75% return on investment over 90 days.

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

Doubleline Shiller Enhanced  vs.  Doubleline Low Duration

Doubleline Shiller

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Shiller Enhanced are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Doubleline Shiller may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Doubleline Low Duration

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Low Duration are ranked lower than 4 (%) 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.

Pair Trading with Doubleline Shiller and Doubleline Low

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

The idea behind Doubleline Shiller Enhanced and Doubleline Low 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.