Correlation Between Doubleline Core and Fulcrum Diversified

Can any of the company-specific risk be diversified away by investing in both Doubleline Core and Fulcrum Diversified 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 Fulcrum Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Doubleline Core Fixed and Fulcrum Diversified Absolute, you can compare the effects of market volatilities on Doubleline Core and Fulcrum Diversified 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 Fulcrum Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Core and Fulcrum Diversified.

Diversification Opportunities for Doubleline Core and Fulcrum Diversified

-0.44

Correlation Coefficient

Doubleline Core  Fulcrum Diversified

Very good diversification

The 3 months correlation between Doubleline and Fulcrum is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Core Fixed and Fulcrum Diversified Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Diversified 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 Core Fixed are associated (or correlated) with Fulcrum Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Diversified has no effect on the direction of Doubleline Core i.e., Doubleline Core and Fulcrum Diversified go up and down completely randomly.

Pair Corralation between Doubleline Core and Fulcrum Diversified

Assuming the 90 days horizon Doubleline Core is expected to generate 1.62 times less return on investment than Fulcrum Diversified. But when comparing it to its historical volatility, Doubleline Core Fixed is 1.67 times less risky than Fulcrum Diversified. It trades about 0.06 of its potential returns per unit of risk. Fulcrum Diversified Absolute is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  936.00  in Fulcrum Diversified Absolute on January 15, 2025 and sell it today you would earn a total of  15.00  from holding Fulcrum Diversified Absolute or generate 1.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Doubleline Core Fixed  vs.  Fulcrum Diversified Absolute

Doubleline Core Fixed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Core Fixed are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Doubleline Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fulcrum Diversified

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fulcrum Diversified Absolute are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fulcrum Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Doubleline Core and Fulcrum Diversified

The main advantage of trading using opposite Doubleline Core and Fulcrum Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Core position performs unexpectedly, Fulcrum Diversified 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 Fulcrum Diversified will offset losses from the drop in Fulcrum Diversified's long position.

The idea behind Doubleline Core Fixed and Fulcrum Diversified Absolute 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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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.