Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF and Doubleline Emerging 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 Bondbloxx ETF and Doubleline Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bondbloxx ETF Trust and Doubleline Emerging Markets, you can compare the effects of market volatilities on Bondbloxx ETF and Doubleline Emerging 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 Bondbloxx ETF with a short position of Doubleline Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Doubleline Emerging.
Diversification Opportunities for Bondbloxx ETF and Doubleline Emerging
The 3 months correlation between Bondbloxx and Doubleline is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and DOUBLELINE EMERGING MARKETS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Emerging and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Doubleline Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Emerging has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Doubleline Emerging go up and down completely randomly.
Pair Corralation between Bondbloxx ETF and Doubleline Emerging
Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 2.43 times less return on investment than Doubleline Emerging. But when comparing it to its historical volatility, Bondbloxx ETF Trust is 2.38 times less risky than Doubleline Emerging. It trades about 0.23 of its potential returns per unit of risk. Doubleline Emerging Markets is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 821.00 in Doubleline Emerging Markets on September 2, 2023 and sell it today you would earn a total of 28.00 from holding Doubleline Emerging Markets or generate 3.41% return on investment over 90 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Bondbloxx ETF Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the insiders.
Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Emerging Markets are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Doubleline Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Bondbloxx ETF and Doubleline Emerging Volatility Contrast
Predicted Return Density
Pair Trading with Bondbloxx ETF and Doubleline Emerging
The main advantage of trading using opposite Bondbloxx ETF and Doubleline Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF position performs unexpectedly, Doubleline Emerging 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 Doubleline Emerging will offset losses from the drop in Doubleline Emerging's long position.
The idea behind Bondbloxx ETF Trust and Doubleline Emerging Markets 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.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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