Correlation Between Doubleline Core and California Bond
Can any of the company-specific risk be diversified away by investing in both Doubleline Core and California Bond 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 Core and California Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doubleline E Fixed and California Bond Fund, you can compare the effects of market volatilities on Doubleline Core and California Bond 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 Core with a short position of California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Core and California Bond.
Diversification Opportunities for Doubleline Core and California Bond
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doubleline and California is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline E Fixed and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond and Doubleline Core 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 E Fixed are associated (or correlated) with California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Doubleline Core i.e., Doubleline Core and California Bond go up and down completely randomly.
Pair Corralation between Doubleline Core and California Bond
Assuming the 90 days horizon Doubleline E Fixed is expected to generate about the same return on investment as California Bond Fund. However, Doubleline Core is 1.45 times more volatile than California Bond Fund. It trades about 0.04 of its potential returns per unit of risk. California Bond Fund is currently producing about 0.06 per unit of risk. If you would invest 980.00 in California Bond Fund on September 3, 2024 and sell it today you would earn a total of 72.00 from holding California Bond Fund or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubleline E Fixed vs. California Bond Fund
Performance |
| Timeline |
| Doubleline E Fixed |
| California Bond |
Doubleline Core and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubleline Core and California Bond
The main advantage of trading using opposite Doubleline Core and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Core position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Doubleline Core vs. Sentinel Small Pany | Doubleline Core vs. Adams Diversified Equity | Doubleline Core vs. Lord Abbett Diversified | Doubleline Core vs. Principal Lifetime Hybrid |
| California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Vanguard California Long Term |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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