Correlation Between American Funds and Oberweis Small
Can any of the company-specific risk be diversified away by investing in both American Funds and Oberweis Small 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 American Funds and Oberweis Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2050 and Oberweis Small Cap Opportunities, you can compare the effects of market volatilities on American Funds and Oberweis Small 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 American Funds with a short position of Oberweis Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Oberweis Small.
Diversification Opportunities for American Funds and Oberweis Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Oberweis is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2050 and Oberweis Small Cap Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Small Cap and American Funds 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 American Funds 2050 are associated (or correlated) with Oberweis Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Small Cap has no effect on the direction of American Funds i.e., American Funds and Oberweis Small go up and down completely randomly.
Pair Corralation between American Funds and Oberweis Small
Assuming the 90 days horizon American Funds 2050 is expected to generate 0.54 times more return on investment than Oberweis Small. However, American Funds 2050 is 1.85 times less risky than Oberweis Small. It trades about 0.11 of its potential returns per unit of risk. Oberweis Small Cap Opportunities is currently generating about 0.05 per unit of risk. If you would invest 1,998 in American Funds 2050 on September 1, 2024 and sell it today you would earn a total of 195.00 from holding American Funds 2050 or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2050 vs. Oberweis Small Cap Opportuniti
Performance |
| Timeline |
| American Funds 2050 |
| Oberweis Small Cap |
American Funds and Oberweis Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Oberweis Small
The main advantage of trading using opposite American Funds and Oberweis Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Oberweis Small 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 Oberweis Small will offset losses from the drop in Oberweis Small's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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