Correlation Between First Investors and Delaware Emerging

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

By analyzing existing cross correlation between First Investors Tax and Delaware Emerging Markets, you can compare the effects of market volatilities on First Investors and Delaware 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 First Investors with a short position of Delaware Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Delaware Emerging.

Diversification Opportunities for First Investors and Delaware Emerging

-0.31

Correlation Coefficient

First Investors  Delaware Emerging

Very good diversification

The 3 months correlation between First and Delaware is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Tax and Delaware Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Emerging Markets and First Investors 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 First Investors Tax are associated (or correlated) with Delaware Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Emerging Markets has no effect on the direction of First Investors i.e., First Investors and Delaware Emerging go up and down completely randomly.

Pair Corralation between First Investors and Delaware Emerging

Assuming the 90 days horizon First Investors Tax is expected to under-perform the Delaware Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Investors Tax is 5.45 times less risky than Delaware Emerging. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Delaware Emerging Markets is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,255  in Delaware Emerging Markets on May 12, 2025 and sell it today you would earn a total of  325.00  from holding Delaware Emerging Markets or generate 14.41% return on investment over 90 days.

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

First Investors Tax  vs.  Delaware Emerging Markets

First Investors Tax

Risk-Adjusted Performance

Weakest

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

Delaware Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Emerging Markets are ranked lower than 13 (%) 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.

Pair Trading with First Investors and Delaware Emerging

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

The idea behind First Investors Tax and Delaware Emerging Markets 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.