Correlation Between Doubleline Emerging and Western Asset
Can any of the company-specific risk be diversified away by investing in both Doubleline Emerging and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on Doubleline Emerging and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Emerging and Western Asset.
Diversification Opportunities for Doubleline Emerging and Western Asset
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Doubleline and Western is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Emerging Markets and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Doubleline Emerging i.e., Doubleline Emerging and Western Asset go up and down completely randomly.
Pair Corralation between Doubleline Emerging and Western Asset
Assuming the 90 days horizon Doubleline Emerging Markets is expected to under-perform the Western Asset. In addition to that, Doubleline Emerging is 1.42 times more volatile than Western Asset Inflation. It trades about -0.12 of its total potential returns per unit of risk. Western Asset Inflation is currently generating about 0.05 per unit of volatility. If you would invest 954.00 in Western Asset Inflation on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Western Asset Inflation or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubleline Emerging Markets vs. Western Asset Inflation
Performance |
| Timeline |
| Doubleline Emerging |
| Western Asset Inflation |
Doubleline Emerging and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubleline Emerging and Western Asset
The main advantage of trading using opposite Doubleline Emerging and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Emerging position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.The idea behind Doubleline Emerging Markets and Western Asset Inflation 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.
| Western Asset vs. Goldman Sachs High | Western Asset vs. T Rowe Price | Western Asset vs. Artisan High Income | Western Asset vs. California High Yield Municipal |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |