Correlation Between Delaware Emerging and Paradigm Micro

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

Diversification Opportunities for Delaware Emerging and Paradigm Micro

0.81

Correlation Coefficient

Delaware Emerging  Paradigm Micro

Very poor diversification

The 3 months correlation between Delaware and Paradigm is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Emerging Markets and Paradigm Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradigm Micro Cap 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 Paradigm Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradigm Micro Cap has no effect on the direction of Delaware Emerging i.e., Delaware Emerging and Paradigm Micro go up and down completely randomly.

Pair Corralation between Delaware Emerging and Paradigm Micro

Assuming the 90 days horizon Delaware Emerging Markets is expected to generate 0.72 times more return on investment than Paradigm Micro. However, Delaware Emerging Markets is 1.38 times less risky than Paradigm Micro. It trades about 0.3 of its potential returns per unit of risk. Paradigm Micro Cap Fund is currently generating about 0.1 per unit of risk. If you would invest  2,090  in Delaware Emerging Markets on April 29, 2025 and sell it today you would earn a total of  513.00  from holding Delaware Emerging Markets or generate 24.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Delaware Emerging Markets  vs.  Paradigm Micro Cap Fund

Delaware Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Emerging Markets are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Delaware Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Paradigm Micro Cap

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paradigm Micro Cap Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Paradigm Micro may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Delaware Emerging and Paradigm Micro

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

The idea behind Delaware Emerging Markets and Paradigm Micro Cap Fund 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.