Correlation Between Small Cap and Delaware Value
Can any of the company-specific risk be diversified away by investing in both Small Cap and Delaware Value 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 Small Cap and Delaware Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Value and Delaware Value Fund, you can compare the effects of market volatilities on Small Cap and Delaware Value 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 Small Cap with a short position of Delaware Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Delaware Value.
Diversification Opportunities for Small Cap and Delaware Value
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SMALL and Delaware is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value and Delaware Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Value and Small Cap 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 Small Cap Value are associated (or correlated) with Delaware Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Value has no effect on the direction of Small Cap i.e., Small Cap and Delaware Value go up and down completely randomly.
Pair Corralation between Small Cap and Delaware Value
Assuming the 90 days horizon Small Cap Value is expected to generate 2.41 times more return on investment than Delaware Value. However, Small Cap is 2.41 times more volatile than Delaware Value Fund. It trades about 0.28 of its potential returns per unit of risk. Delaware Value Fund is currently generating about 0.37 per unit of risk. If you would invest 1,108 in Small Cap Value on September 3, 2024 and sell it today you would earn a total of 111.00 from holding Small Cap Value or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Value vs. Delaware Value Fund
Performance |
| Timeline |
| Small Cap Value |
| Delaware Value |
Small Cap and Delaware Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Delaware Value
The main advantage of trading using opposite Small Cap and Delaware Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Delaware Value 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 Delaware Value will offset losses from the drop in Delaware Value's long position.| Small Cap vs. Vanguard Small Cap Value | Small Cap vs. Vanguard Small Cap Value | Small Cap vs. Us Small Cap | Small Cap vs. Us Targeted Value |
| Delaware Value vs. Chartwell Small Cap | Delaware Value vs. Baird Smallmid Cap | Delaware Value vs. Rbb Fund | Delaware Value vs. Small Cap Value |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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