Correlation Between Icon Bond and Doubleline Income

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

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

Diversification Opportunities for Icon Bond and Doubleline Income

0.92

Correlation Coefficient

Icon Bond  Doubleline Income

Almost no diversification

The 3 months correlation between Icon and Doubleline is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Icon Bond Fund and Doubleline Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Income and Icon Bond 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 Icon Bond Fund are associated (or correlated) with Doubleline Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Income has no effect on the direction of Icon Bond i.e., Icon Bond and Doubleline Income go up and down completely randomly.

Pair Corralation between Icon Bond and Doubleline Income

Assuming the 90 days horizon Icon Bond Fund is expected to generate 1.18 times more return on investment than Doubleline Income. However, Icon Bond is 1.18 times more volatile than Doubleline Income. It trades about 0.1 of its potential returns per unit of risk. Doubleline Income is currently generating about 0.09 per unit of risk. If you would invest  868.00  in Icon Bond Fund on September 1, 2024 and sell it today you would earn a total of  3.00  from holding Icon Bond Fund or generate 0.35% return on investment over 90 days.

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

Icon Bond Fund  vs.  Doubleline Income

Icon Bond Fund

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Bond Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Icon Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Doubleline Income

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Doubleline Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Icon Bond and Doubleline Income

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

The idea behind Icon Bond Fund and Doubleline Income 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.