Correlation Between Delaware Value and First Eagle
Can any of the company-specific risk be diversified away by investing in both Delaware Value and First Eagle 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 Delaware Value and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delaware Value Fund and First Eagle Overseas, you can compare the effects of market volatilities on Delaware Value and First Eagle 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 Delaware Value with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Value and First Eagle.
Diversification Opportunities for Delaware Value and First Eagle
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delaware and First is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Value Fund and First Eagle Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Overseas and Delaware Value 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 Delaware Value Fund are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Overseas has no effect on the direction of Delaware Value i.e., Delaware Value and First Eagle go up and down completely randomly.
Pair Corralation between Delaware Value and First Eagle
Assuming the 90 days horizon Delaware Value Fund is expected to generate 0.99 times more return on investment than First Eagle. However, Delaware Value Fund is 1.01 times less risky than First Eagle. It trades about 0.18 of its potential returns per unit of risk. First Eagle Overseas is currently generating about 0.12 per unit of risk. If you would invest 1,354 in Delaware Value Fund on October 20, 2024 and sell it today you would earn a total of 24.00 from holding Delaware Value Fund or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delaware Value Fund vs. First Eagle Overseas
Performance |
| Timeline |
| Delaware Value |
| First Eagle Overseas |
Delaware Value and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delaware Value and First Eagle
The main advantage of trading using opposite Delaware Value and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Value position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Delaware Value vs. Health Care Ultrasector | Delaware Value vs. Blackrock Health Sciences | Delaware Value vs. Lord Abbett Health | Delaware Value vs. Hartford Healthcare Hls |
| First Eagle vs. First Eagle Global | First Eagle vs. Turner Emerging Growth | First Eagle vs. Oppenheimer Developing Markets | First Eagle vs. Delaware Value Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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