Correlation Between Delaware Healthcare and Live Oak
Can any of the company-specific risk be diversified away by investing in both Delaware Healthcare and Live Oak 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 Live Oak 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 Live Oak Health, you can compare the effects of market volatilities on Delaware Healthcare and Live Oak 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 Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Healthcare and Live Oak.
Diversification Opportunities for Delaware Healthcare and Live Oak
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delaware and LIVE is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Healthcare Fund and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Delaware Healthcare i.e., Delaware Healthcare and Live Oak go up and down completely randomly.
Pair Corralation between Delaware Healthcare and Live Oak
Assuming the 90 days horizon Delaware Healthcare Fund is expected to under-perform the Live Oak. In addition to that, Delaware Healthcare is 1.12 times more volatile than Live Oak Health. It trades about -0.18 of its total potential returns per unit of risk. Live Oak Health is currently generating about 0.08 per unit of volatility. If you would invest 2,166 in Live Oak Health on August 27, 2024 and sell it today you would earn a total of 32.00 from holding Live Oak Health or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delaware Healthcare Fund vs. Live Oak Health
Performance |
| Timeline |
| Delaware Healthcare |
| Live Oak Health |
Delaware Healthcare and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delaware Healthcare and Live Oak
The main advantage of trading using opposite Delaware Healthcare and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Healthcare position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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