Correlation Between Delaware Healthcare and Baron Real

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

Diversification Opportunities for Delaware Healthcare and Baron Real

0.54

Correlation Coefficient

Delaware Healthcare  Baron Real

Very weak diversification

The 3 months correlation between Delaware and Baron is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Healthcare Fund and Baron Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Real Estate 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 Baron Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Real Estate has no effect on the direction of Delaware Healthcare i.e., Delaware Healthcare and Baron Real go up and down completely randomly.

Pair Corralation between Delaware Healthcare and Baron Real

Assuming the 90 days horizon Delaware Healthcare Fund is expected to generate 0.72 times more return on investment than Baron Real. However, Delaware Healthcare Fund is 1.39 times less risky than Baron Real. It trades about 0.09 of its potential returns per unit of risk. Baron Real Estate is currently generating about 0.01 per unit of risk. If you would invest  2,292  in Delaware Healthcare Fund on December 20, 2024 and sell it today you would earn a total of  94.00  from holding Delaware Healthcare Fund or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Delaware Healthcare Fund  vs.  Baron Real Estate

Delaware Healthcare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Healthcare Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. 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.

Baron Real Estate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Real Estate are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Baron Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Delaware Healthcare and Baron Real

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

The idea behind Delaware Healthcare Fund and Baron Real Estate 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.