Correlation Between Delaware Emerging and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both Delaware Emerging and Baron Emerging 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 Emerging and Baron Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delaware Emerging Markets and Baron Emerging Markets, you can compare the effects of market volatilities on Delaware Emerging and Baron Emerging 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 Emerging with a short position of Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Emerging and Baron Emerging.
Diversification Opportunities for Delaware Emerging and Baron Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Delaware and Baron is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Emerging Markets and Baron Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Emerging Markets and Delaware Emerging 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 Emerging Markets are associated (or correlated) with Baron Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Emerging Markets has no effect on the direction of Delaware Emerging i.e., Delaware Emerging and Baron Emerging go up and down completely randomly.
Pair Corralation between Delaware Emerging and Baron Emerging
Assuming the 90 days horizon Delaware Emerging Markets is expected to generate 1.28 times more return on investment than Baron Emerging. However, Delaware Emerging is 1.28 times more volatile than Baron Emerging Markets. It trades about 0.09 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 1,699 in Delaware Emerging Markets on January 26, 2024 and sell it today you would earn a total of 416.00 from holding Delaware Emerging Markets or generate 24.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delaware Emerging Markets vs. Baron Emerging Markets
Performance |
| Timeline |
| Delaware Emerging Markets |
| Baron Emerging Markets |
Delaware Emerging and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delaware Emerging and Baron Emerging
The main advantage of trading using opposite Delaware Emerging and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Emerging position performs unexpectedly, Baron Emerging 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 Baron Emerging will offset losses from the drop in Baron Emerging's long position.| Delaware Emerging vs. Amana Income Fund | Delaware Emerging vs. Amana Growth Fund | Delaware Emerging vs. Amana Participation Fund | Delaware Emerging vs. HUMANA INC |
| Baron Emerging vs. Heritage Fund Investor | Baron Emerging vs. Real Estate Fund | Baron Emerging vs. Global Growth Fund | Baron Emerging vs. Utilities Fund Investor |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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