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 Diversified, 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
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Doubleline and Western is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Emerging Markets and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified 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 Diversified 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 1.78 times more volatile than Western Asset Diversified. It trades about -0.12 of its total potential returns per unit of risk. Western Asset Diversified is currently generating about -0.05 per unit of volatility. If you would invest 1,553 in Western Asset Diversified on August 24, 2024 and sell it today you would lose (4.00) from holding Western Asset Diversified or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Doubleline Emerging Markets vs. Western Asset Diversified
Performance |
| Timeline |
| Doubleline Emerging |
| Western Asset Diversified |
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.| Doubleline Emerging vs. Pimco Emerging Local | Doubleline Emerging vs. HUMANA INC | Doubleline Emerging vs. Aquagold International | Doubleline Emerging vs. Barloworld Ltd ADR |
| Western Asset vs. Dreyfusstandish Global Fixed | Western Asset vs. Ms Global Fixed | Western Asset vs. Us Vector Equity | Western Asset vs. Small Cap Equity |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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