Correlation Between Delaware Limited and Delaware Value

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

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

Diversification Opportunities for Delaware Limited and Delaware Value

0.45

Correlation Coefficient

Delaware Limited  Delaware Value

Very weak diversification

The 3 months correlation between Delaware and Delaware is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Limited Term Diversif and Delaware Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Value and Delaware Limited 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 Limited Term Diversified are associated (or correlated) with Delaware Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Value has no effect on the direction of Delaware Limited i.e., Delaware Limited and Delaware Value go up and down completely randomly.

Pair Corralation between Delaware Limited and Delaware Value

Assuming the 90 days horizon Delaware Limited is expected to generate 4.84 times less return on investment than Delaware Value. But when comparing it to its historical volatility, Delaware Limited Term Diversified is 5.75 times less risky than Delaware Value. It trades about 0.16 of its potential returns per unit of risk. Delaware Value Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,311  in Delaware Value Fund on May 4, 2025 and sell it today you would earn a total of  89.00  from holding Delaware Value Fund or generate 6.79% return on investment over 90 days.

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

Delaware Limited Term Diversif  vs.  Delaware Value Fund

Delaware Limited Term

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Limited Term Diversified are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Delaware Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Delaware Value

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Value Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Delaware Value may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Delaware Limited and Delaware Value

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

The idea behind Delaware Limited Term Diversified and Delaware Value 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.