Correlation Between Doubleline and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Doubleline and Metropolitan West 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 and Metropolitan West 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 Metropolitan West Total, you can compare the effects of market volatilities on Doubleline and Metropolitan West 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 with a short position of Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline and Metropolitan West.
Diversification Opportunities for Doubleline and Metropolitan West
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Doubleline and Metropolitan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline E Fixed and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total and Doubleline 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 Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of Doubleline i.e., Doubleline and Metropolitan West go up and down completely randomly.
Pair Corralation between Doubleline and Metropolitan West
Assuming the 90 days horizon Doubleline E Fixed is expected to generate 0.76 times more return on investment than Metropolitan West. However, Doubleline E Fixed is 1.31 times less risky than Metropolitan West. It trades about -0.03 of its potential returns per unit of risk. Metropolitan West Total is currently generating about -0.04 per unit of risk. If you would invest 931.00 in Doubleline E Fixed on September 13, 2024 and sell it today you would lose (3.00) from holding Doubleline E Fixed or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubleline E Fixed vs. Metropolitan West Total
Performance |
| Timeline |
| Doubleline E Fixed |
| Metropolitan West Total |
Doubleline and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubleline and Metropolitan West
The main advantage of trading using opposite Doubleline and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Doubleline vs. Barings Global Floating | Doubleline vs. Franklin Mutual Global | Doubleline vs. Ab Global Bond | Doubleline vs. Ab Global Real |
| Metropolitan West vs. Hewitt Money Market | Metropolitan West vs. Putnam Money Market | Metropolitan West vs. Chestnut Street Exchange | Metropolitan West vs. Schwab Treasury Money |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |