Correlation Between Delaware Healthcare and Optimum Small
Can any of the company-specific risk be diversified away by investing in both Delaware Healthcare and Optimum Small 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 Healthcare and Optimum Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delaware Healthcare Fund and Optimum Small Mid Cap, you can compare the effects of market volatilities on Delaware Healthcare and Optimum Small 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 Healthcare with a short position of Optimum Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Healthcare and Optimum Small.
Diversification Opportunities for Delaware Healthcare and Optimum Small
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delaware and Optimum is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Healthcare Fund and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid and Delaware Healthcare 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 Healthcare Fund are associated (or correlated) with Optimum Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of Delaware Healthcare i.e., Delaware Healthcare and Optimum Small go up and down completely randomly.
Pair Corralation between Delaware Healthcare and Optimum Small
Assuming the 90 days horizon Delaware Healthcare Fund is expected to under-perform the Optimum Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Delaware Healthcare Fund is 1.42 times less risky than Optimum Small. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Optimum Small Mid Cap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,147 in Optimum Small Mid Cap on August 28, 2024 and sell it today you would earn a total of 117.00 from holding Optimum Small Mid Cap or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delaware Healthcare Fund vs. Optimum Small Mid Cap
Performance |
| Timeline |
| Delaware Healthcare |
| Optimum Small Mid |
Delaware Healthcare and Optimum Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delaware Healthcare and Optimum Small
The main advantage of trading using opposite Delaware Healthcare and Optimum Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Healthcare position performs unexpectedly, Optimum Small 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 Optimum Small will offset losses from the drop in Optimum Small's long position.| Delaware Healthcare vs. Optimum Small Mid Cap | Delaware Healthcare vs. Optimum Small Mid Cap | Delaware Healthcare vs. Ivy Apollo Multi Asset | Delaware Healthcare vs. Optimum Fixed Income |
| Optimum Small vs. Optimum Small Mid Cap | Optimum Small vs. Ivy Apollo Multi Asset | Optimum Small vs. Optimum Fixed Income | Optimum Small vs. Ivy Asset Strategy |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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