Correlation Between Optimum Small and Delaware Small
Can any of the company-specific risk be diversified away by investing in both Optimum Small 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 Optimum Small and Delaware Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optimum Small Mid Cap and Delaware Small Cap, you can compare the effects of market volatilities on Optimum Small 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 Optimum Small with a short position of Delaware Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optimum Small and Delaware Small.
Diversification Opportunities for Optimum Small and Delaware Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Optimum and Delaware is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Optimum Small Mid Cap 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 Optimum Small 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 Optimum Small Mid Cap 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 Optimum Small i.e., Optimum Small and Delaware Small go up and down completely randomly.
Pair Corralation between Optimum Small and Delaware Small
Assuming the 90 days horizon Optimum Small is expected to generate 1.02 times less return on investment than Delaware Small. But when comparing it to its historical volatility, Optimum Small Mid Cap is 1.1 times less risky than Delaware Small. It trades about 0.13 of its potential returns per unit of risk. Delaware Small Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,899 in Delaware Small Cap on August 29, 2024 and sell it today you would earn a total of 685.00 from holding Delaware Small Cap or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optimum Small Mid Cap vs. Delaware Small Cap
Performance |
| Timeline |
| Optimum Small Mid |
| Delaware Small Cap |
Optimum Small and Delaware Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optimum Small and Delaware Small
The main advantage of trading using opposite Optimum Small and Delaware Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimum Small 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.| Optimum Small vs. Vanguard Emerging Markets | Optimum Small vs. T Rowe Price | Optimum Small vs. Black Oak Emerging | Optimum Small vs. Commodities Strategy Fund |
| Delaware Small vs. Thornburg International Value | Delaware Small vs. Janus Triton Fund | Delaware Small vs. Alger Capital Appreciation | Delaware Small vs. Invesco Stock 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |