Correlation Between Bank of America and Doubleline Long

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank of America 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 Bank of America and Doubleline Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Doubleline Long Duration, you can compare the effects of market volatilities on Bank of America 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 Bank of America with a short position of Doubleline Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Doubleline Long.

Diversification Opportunities for Bank of America and Doubleline Long

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bank and Doubleline is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America 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 Bank of America 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 Bank of America 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 Bank of America i.e., Bank of America and Doubleline Long go up and down completely randomly.

Pair Corralation between Bank of America and Doubleline Long

Considering the 90-day investment horizon Bank of America is expected to generate 1.82 times more return on investment than Doubleline Long. However, Bank of America is 1.82 times more volatile than Doubleline Long Duration. It trades about 0.12 of its potential returns per unit of risk. Doubleline Long Duration is currently generating about 0.02 per unit of risk. If you would invest  3,495  in Bank of America on September 1, 2024 and sell it today you would earn a total of  1,256  from holding Bank of America or generate 35.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.47%
ValuesDaily Returns

Bank of America  vs.  Doubleline Long Duration

 Performance 
       Timeline  
Bank of America 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bank of America are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bank of America exhibited solid returns over the last few months and may actually be approaching a breakup point.
Doubleline Long Duration 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Bank of America and Doubleline Long Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank of America and Doubleline Long

The main advantage of trading using opposite Bank of America and Doubleline Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America 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 Bank of America 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation