Correlation Between RiverNorthDoubleLine and Clough Global
Can any of the company-specific risk be diversified away by investing in both RiverNorthDoubleLine and Clough Global 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 RiverNorthDoubleLine and Clough Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RiverNorthDoubleLine Strategic Opportunity and Clough Global Opportunities, you can compare the effects of market volatilities on RiverNorthDoubleLine and Clough Global 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 RiverNorthDoubleLine with a short position of Clough Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiverNorthDoubleLine and Clough Global.
Diversification Opportunities for RiverNorthDoubleLine and Clough Global
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RiverNorthDoubleLine and Clough is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorthDoubleLine Strategic and Clough Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Opport and RiverNorthDoubleLine 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 RiverNorthDoubleLine Strategic Opportunity are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Opport has no effect on the direction of RiverNorthDoubleLine i.e., RiverNorthDoubleLine and Clough Global go up and down completely randomly.
Pair Corralation between RiverNorthDoubleLine and Clough Global
Considering the 90-day investment horizon RiverNorthDoubleLine is expected to generate 1.18 times less return on investment than Clough Global. But when comparing it to its historical volatility, RiverNorthDoubleLine Strategic Opportunity is 1.3 times less risky than Clough Global. It trades about 0.09 of its potential returns per unit of risk. Clough Global Opportunities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Clough Global Opportunities on August 31, 2024 and sell it today you would earn a total of 124.00 from holding Clough Global Opportunities or generate 30.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RiverNorthDoubleLine Strategic vs. Clough Global Opportunities
Performance |
| Timeline |
| RiverNorthDoubleLine |
| Clough Global Opport |
RiverNorthDoubleLine and Clough Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RiverNorthDoubleLine and Clough Global
The main advantage of trading using opposite RiverNorthDoubleLine and Clough Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiverNorthDoubleLine position performs unexpectedly, Clough Global 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 Clough Global will offset losses from the drop in Clough Global's long position.The idea behind RiverNorthDoubleLine Strategic Opportunity and Clough Global Opportunities 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.
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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