Correlation Between Europacific Growth and Oberweis Funds
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Oberweis Funds 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 Europacific Growth and Oberweis Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Oberweis Funds , you can compare the effects of market volatilities on Europacific Growth and Oberweis Funds 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 Europacific Growth with a short position of Oberweis Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Oberweis Funds.
Diversification Opportunities for Europacific Growth and Oberweis Funds
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Europacific and Oberweis is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Oberweis Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Funds and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with Oberweis Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Funds has no effect on the direction of Europacific Growth i.e., Europacific Growth and Oberweis Funds go up and down completely randomly.
Pair Corralation between Europacific Growth and Oberweis Funds
Assuming the 90 days horizon Europacific Growth Fund is expected to generate 0.9 times more return on investment than Oberweis Funds. However, Europacific Growth Fund is 1.11 times less risky than Oberweis Funds. It trades about -0.13 of its potential returns per unit of risk. Oberweis Funds is currently generating about -0.12 per unit of risk. If you would invest 5,780 in Europacific Growth Fund on August 30, 2024 and sell it today you would lose (117.00) from holding Europacific Growth Fund or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Oberweis Funds
Performance |
| Timeline |
| Europacific Growth |
| Oberweis Funds |
Europacific Growth and Oberweis Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Oberweis Funds
The main advantage of trading using opposite Europacific Growth and Oberweis Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Oberweis Funds 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 Funds will offset losses from the drop in Oberweis Funds' long position.| Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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