Correlation Between SPDR DoubleLine and Fm Emerald

Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and Fm Emerald 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 SPDR DoubleLine and Fm Emerald into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR DoubleLine Total and Fm Emerald Life, you can compare the effects of market volatilities on SPDR DoubleLine and Fm Emerald 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 SPDR DoubleLine with a short position of Fm Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and Fm Emerald.

Diversification Opportunities for SPDR DoubleLine and Fm Emerald

0.42

Correlation Coefficient

SPDR DoubleLine  Fm Emerald

Very weak diversification

The 3 months correlation between SPDR and LFSC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Total and Fm Emerald Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fm Emerald Life and SPDR 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 SPDR DoubleLine Total are associated (or correlated) with Fm Emerald. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fm Emerald Life has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and Fm Emerald go up and down completely randomly.

Pair Corralation between SPDR DoubleLine and Fm Emerald

Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 74.29 times less return on investment than Fm Emerald. But when comparing it to its historical volatility, SPDR DoubleLine Total is 10.39 times less risky than Fm Emerald. It trades about 0.04 of its potential returns per unit of risk. Fm Emerald Life is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  2,804  in Fm Emerald Life on September 12, 2025 and sell it today you would earn a total of  1,131  from holding Fm Emerald Life or generate 40.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

SPDR DoubleLine Total  vs.  Fm Emerald Life

SPDR DoubleLine Total

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR DoubleLine Total are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SPDR DoubleLine is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Fm Emerald Life

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fm Emerald Life are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Fm Emerald exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPDR DoubleLine and Fm Emerald

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

The idea behind SPDR DoubleLine Total and Fm Emerald Life 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.