Correlation Between First Investors and Delaware Small
Can any of the company-specific risk be diversified away by investing in both First Investors and Delaware 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 First Investors and Delaware Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Investors Tax and Delaware Small Cap, you can compare the effects of market volatilities on First Investors and Delaware 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 First Investors with a short position of Delaware Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Delaware Small.
Diversification Opportunities for First Investors and Delaware Small
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Delaware is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Tax and Delaware Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Small Cap and First Investors 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 First Investors Tax are associated (or correlated) with Delaware Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Small Cap has no effect on the direction of First Investors i.e., First Investors and Delaware Small go up and down completely randomly.
Pair Corralation between First Investors and Delaware Small
Assuming the 90 days horizon First Investors is expected to generate 2.64 times less return on investment than Delaware Small. But when comparing it to its historical volatility, First Investors Tax is 3.95 times less risky than Delaware Small. It trades about 0.07 of its potential returns per unit of risk. Delaware Small Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,780 in Delaware Small Cap on August 26, 2024 and sell it today you would earn a total of 511.00 from holding Delaware Small Cap or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Investors Tax vs. Delaware Small Cap
Performance |
| Timeline |
| First Investors Tax |
| Delaware Small Cap |
First Investors and Delaware Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Investors and Delaware Small
The main advantage of trading using opposite First Investors and Delaware Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Investors position performs unexpectedly, Delaware 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 Delaware Small will offset losses from the drop in Delaware Small's long position.| First Investors vs. Optimum Small Mid Cap | First Investors vs. Optimum Small Mid Cap | First Investors vs. Ivy Apollo Multi Asset | First Investors vs. Optimum Fixed Income |
| Delaware Small vs. Optimum Small Mid Cap | Delaware Small vs. Optimum Small Mid Cap | Delaware Small vs. Ivy Apollo Multi Asset | Delaware Small vs. Optimum Fixed Income |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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