Correlation Between Doubleline Core and Doubleline Selective

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

By analyzing existing cross correlation between Doubleline E Fixed and Doubleline Selective Credit, you can compare the effects of market volatilities on Doubleline Core and Doubleline Selective 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 Selective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Core and Doubleline Selective.

Diversification Opportunities for Doubleline Core and Doubleline Selective

0.61

Correlation Coefficient

Doubleline Core  Doubleline Selective

Poor diversification

The 3 months correlation between Doubleline and Doubleline is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline E Fixed and Doubleline Selective Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Selective 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 E Fixed are associated (or correlated) with Doubleline Selective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Selective has no effect on the direction of Doubleline Core i.e., Doubleline Core and Doubleline Selective go up and down completely randomly.

Pair Corralation between Doubleline Core and Doubleline Selective

Assuming the 90 days horizon Doubleline Core is expected to generate 1.89 times less return on investment than Doubleline Selective. In addition to that, Doubleline Core is 1.8 times more volatile than Doubleline Selective Credit. It trades about 0.04 of its total potential returns per unit of risk. Doubleline Selective Credit is currently generating about 0.15 per unit of volatility. If you would invest  636.00  in Doubleline Selective Credit on August 26, 2024 and sell it today you would earn a total of  110.00  from holding Doubleline Selective Credit or generate 17.3% return on investment over 90 days.

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

Doubleline E Fixed  vs.  Doubleline Selective Credit

Doubleline E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubleline E 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 Selective

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Selective Credit are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Doubleline Selective 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 Selective

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

The idea behind Doubleline E Fixed and Doubleline Selective Credit 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.