Correlation Between Dow 2x and Delaware Healthcare
Can any of the company-specific risk be diversified away by investing in both Dow 2x and Delaware Healthcare 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 Dow 2x and Delaware Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow 2x Strategy and Delaware Healthcare Fund, you can compare the effects of market volatilities on Dow 2x and Delaware Healthcare 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 Dow 2x with a short position of Delaware Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow 2x and Delaware Healthcare.
Diversification Opportunities for Dow 2x and Delaware Healthcare
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and Delaware is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dow 2x Strategy and Delaware Healthcare Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Healthcare and Dow 2x 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 Dow 2x Strategy are associated (or correlated) with Delaware Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Healthcare has no effect on the direction of Dow 2x i.e., Dow 2x and Delaware Healthcare go up and down completely randomly.
Pair Corralation between Dow 2x and Delaware Healthcare
Assuming the 90 days horizon Dow 2x Strategy is expected to under-perform the Delaware Healthcare. In addition to that, Dow 2x is 1.92 times more volatile than Delaware Healthcare Fund. It trades about -0.32 of its total potential returns per unit of risk. Delaware Healthcare Fund is currently generating about -0.16 per unit of volatility. If you would invest 2,474 in Delaware Healthcare Fund on October 9, 2024 and sell it today you would lose (72.00) from holding Delaware Healthcare Fund or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow 2x Strategy vs. Delaware Healthcare Fund
Performance |
| Timeline |
| Dow 2x Strategy |
| Delaware Healthcare |
Dow 2x and Delaware Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dow 2x and Delaware Healthcare
The main advantage of trading using opposite Dow 2x and Delaware Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow 2x position performs unexpectedly, Delaware Healthcare 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 Healthcare will offset losses from the drop in Delaware Healthcare's long position.| Dow 2x vs. Sp 500 2x | Dow 2x vs. Inverse Dow 2x | Dow 2x vs. Nasdaq 100 2x Strategy | Dow 2x vs. Russell 2000 2x |
| Delaware Healthcare vs. Msift High Yield | Delaware Healthcare vs. Mesirow Financial High | Delaware Healthcare vs. Ab High Income | Delaware Healthcare vs. Artisan High 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |