Correlation Between Doubleline Shiller and Edgewood Growth

Can any of the company-specific risk be diversified away by investing in both Doubleline Shiller and Edgewood Growth 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 Edgewood Growth 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 Edgewood Growth Fund, you can compare the effects of market volatilities on Doubleline Shiller and Edgewood Growth 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 Edgewood Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Shiller and Edgewood Growth.

Diversification Opportunities for Doubleline Shiller and Edgewood Growth

0.87

Correlation Coefficient

Doubleline Shiller  Edgewood Growth

Very poor diversification

The 3 months correlation between Doubleline and Edgewood is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Shiller Enhanced and Edgewood Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewood Growth 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 Edgewood Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewood Growth has no effect on the direction of Doubleline Shiller i.e., Doubleline Shiller and Edgewood Growth go up and down completely randomly.

Pair Corralation between Doubleline Shiller and Edgewood Growth

Assuming the 90 days horizon Doubleline Shiller Enhanced is expected to generate 0.71 times more return on investment than Edgewood Growth. However, Doubleline Shiller Enhanced is 1.41 times less risky than Edgewood Growth. It trades about 0.22 of its potential returns per unit of risk. Edgewood Growth Fund is currently generating about 0.14 per unit of risk. If you would invest  1,496  in Doubleline Shiller Enhanced on August 31, 2024 and sell it today you would earn a total of  146.00  from holding Doubleline Shiller Enhanced or generate 9.76% return on investment over 90 days.

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

Doubleline Shiller Enhanced  vs.  Edgewood Growth Fund

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 inconsistent basic indicators, Doubleline Shiller may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Edgewood Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Edgewood Growth Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Edgewood Growth may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Doubleline Shiller and Edgewood Growth

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

The idea behind Doubleline Shiller Enhanced and Edgewood Growth Fund 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.