Correlation Between Doubleline Emerging and American Balanced
Can any of the company-specific risk be diversified away by investing in both Doubleline Emerging and American Balanced 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 Emerging and American Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doubleline Emerging Markets and American Balanced Fund, you can compare the effects of market volatilities on Doubleline Emerging and American Balanced 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 Emerging with a short position of American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Emerging and American Balanced.
Diversification Opportunities for Doubleline Emerging and American Balanced
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Doubleline and American is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Emerging Markets and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced and Doubleline Emerging 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 Emerging Markets are associated (or correlated) with American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of Doubleline Emerging i.e., Doubleline Emerging and American Balanced go up and down completely randomly.
Pair Corralation between Doubleline Emerging and American Balanced
Assuming the 90 days horizon Doubleline Emerging is expected to generate 5.21 times less return on investment than American Balanced. But when comparing it to its historical volatility, Doubleline Emerging Markets is 1.2 times less risky than American Balanced. It trades about 0.03 of its potential returns per unit of risk. American Balanced Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,940 in American Balanced Fund on September 12, 2024 and sell it today you would earn a total of 712.00 from holding American Balanced Fund or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubleline Emerging Markets vs. American Balanced Fund
Performance |
| Timeline |
| Doubleline Emerging |
| American Balanced |
Doubleline Emerging and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubleline Emerging and American Balanced
The main advantage of trading using opposite Doubleline Emerging and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Emerging position performs unexpectedly, American Balanced 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 American Balanced will offset losses from the drop in American Balanced's long position.| Doubleline Emerging vs. SCOR PK | Doubleline Emerging vs. Morningstar Unconstrained Allocation | Doubleline Emerging vs. Via Renewables | Doubleline Emerging vs. Bondbloxx ETF Trust |
| American Balanced vs. Origin Emerging Markets | American Balanced vs. Doubleline Emerging Markets | American Balanced vs. Black Oak Emerging | American Balanced vs. Barings Emerging Markets |
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.
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