Correlation Between Delaware Value and American Mutual
Can any of the company-specific risk be diversified away by investing in both Delaware Value and American Mutual 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 Value and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delaware Value Fund and American Mutual Fund, you can compare the effects of market volatilities on Delaware Value and American Mutual 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 Value with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Value and American Mutual.
Diversification Opportunities for Delaware Value and American Mutual
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Delaware and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Value Fund and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Delaware Value 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 Value Fund are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Delaware Value i.e., Delaware Value and American Mutual go up and down completely randomly.
Pair Corralation between Delaware Value and American Mutual
Assuming the 90 days horizon Delaware Value is expected to generate 1.43 times less return on investment than American Mutual. In addition to that, Delaware Value is 1.16 times more volatile than American Mutual Fund. It trades about 0.03 of its total potential returns per unit of risk. American Mutual Fund is currently generating about 0.05 per unit of volatility. If you would invest 4,420 in American Mutual Fund on January 25, 2024 and sell it today you would earn a total of 798.00 from holding American Mutual Fund or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delaware Value Fund vs. American Mutual Fund
Performance |
| Timeline |
| Delaware Value |
| American Mutual |
Delaware Value and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delaware Value and American Mutual
The main advantage of trading using opposite Delaware Value and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Value position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Delaware Value vs. Edgewood Growth Fund | Delaware Value vs. Hartford Schroders Emerging | Delaware Value vs. HUMANA INC | Delaware Value vs. Aquagold International |
| American Mutual vs. Loomis Sayles Growth | American Mutual vs. Diamond Hill Large | American Mutual vs. Champlain Small Pany | American Mutual vs. HUMANA INC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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