Correlation Between Delaware Emerging and Gateway Fund

Can any of the company-specific risk be diversified away by investing in both Delaware Emerging and Gateway Fund 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 Gateway Fund 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 Gateway Fund Class, you can compare the effects of market volatilities on Delaware Emerging and Gateway Fund 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 Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Emerging and Gateway Fund.

Diversification Opportunities for Delaware Emerging and Gateway Fund

0.93

Correlation Coefficient

Delaware Emerging  Gateway Fund

Almost no diversification

The 3 months correlation between Delaware and Gateway is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Emerging Markets and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class 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 Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of Delaware Emerging i.e., Delaware Emerging and Gateway Fund go up and down completely randomly.

Pair Corralation between Delaware Emerging and Gateway Fund

Assuming the 90 days horizon Delaware Emerging is expected to generate 1.99 times less return on investment than Gateway Fund. But when comparing it to its historical volatility, Delaware Emerging Markets is 2.86 times less risky than Gateway Fund. It trades about 0.46 of its potential returns per unit of risk. Gateway Fund Class is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  4,471  in Gateway Fund Class on May 4, 2025 and sell it today you would earn a total of  286.00  from holding Gateway Fund Class or generate 6.4% 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.  Gateway Fund Class

Delaware Emerging Markets

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Emerging Markets are ranked lower than 36 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Delaware Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gateway Fund Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Fund Class are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gateway Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Delaware Emerging and Gateway Fund

The main advantage of trading using opposite Delaware Emerging and Gateway Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Emerging position performs unexpectedly, Gateway Fund 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 Gateway Fund will offset losses from the drop in Gateway Fund's long position.

The idea behind Delaware Emerging Markets and Gateway Fund Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.