Correlation Between Delaware Healthcare and Large Cap

Can any of the company-specific risk be diversified away by investing in both Delaware Healthcare and Large Cap 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 Healthcare and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Delaware Healthcare Fund and Large Cap Value, you can compare the effects of market volatilities on Delaware Healthcare and Large Cap 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 Healthcare with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Healthcare and Large Cap.

Diversification Opportunities for Delaware Healthcare and Large Cap

0.24

Correlation Coefficient

Delaware Healthcare  Large Cap

Modest diversification

The 3 months correlation between Delaware and Large is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Healthcare Fund and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value and Delaware Healthcare 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 Healthcare Fund are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Delaware Healthcare i.e., Delaware Healthcare and Large Cap go up and down completely randomly.

Pair Corralation between Delaware Healthcare and Large Cap

Assuming the 90 days horizon Delaware Healthcare is expected to generate 627.67 times less return on investment than Large Cap. In addition to that, Delaware Healthcare is 1.74 times more volatile than Large Cap Value. It trades about 0.0 of its total potential returns per unit of risk. Large Cap Value is currently generating about 0.27 per unit of volatility. If you would invest  1,631  in Large Cap Value on April 24, 2025 and sell it today you would earn a total of  199.00  from holding Large Cap Value or generate 12.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Delaware Healthcare Fund  vs.  Large Cap Value

Delaware Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delaware Healthcare Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Delaware Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Large Cap Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap Value are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Large Cap may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Delaware Healthcare and Large Cap

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

The idea behind Delaware Healthcare Fund and Large Cap Value 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.