Correlation Between Highland Long/short and Oberweis Micro-cap
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Oberweis Micro-cap 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 Highland Long/short and Oberweis Micro-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Oberweis Micro Cap Fund, you can compare the effects of market volatilities on Highland Long/short and Oberweis Micro-cap 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 Highland Long/short with a short position of Oberweis Micro-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Oberweis Micro-cap.
Diversification Opportunities for Highland Long/short and Oberweis Micro-cap
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highland and Oberweis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Oberweis Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Micro Cap and Highland Long/short 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 Highland Longshort Healthcare are associated (or correlated) with Oberweis Micro-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Micro Cap has no effect on the direction of Highland Long/short i.e., Highland Long/short and Oberweis Micro-cap go up and down completely randomly.
Pair Corralation between Highland Long/short and Oberweis Micro-cap
Assuming the 90 days horizon Highland Long/short is expected to generate 3.44 times less return on investment than Oberweis Micro-cap. But when comparing it to its historical volatility, Highland Longshort Healthcare is 6.9 times less risky than Oberweis Micro-cap. It trades about 0.13 of its potential returns per unit of risk. Oberweis Micro Cap Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,381 in Oberweis Micro Cap Fund on September 3, 2024 and sell it today you would earn a total of 1,669 from holding Oberweis Micro Cap Fund or generate 49.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Oberweis Micro Cap Fund
Performance |
| Timeline |
| Highland Long/short |
| Oberweis Micro Cap |
Highland Long/short and Oberweis Micro-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Oberweis Micro-cap
The main advantage of trading using opposite Highland Long/short and Oberweis Micro-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Oberweis Micro-cap 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 Micro-cap will offset losses from the drop in Oberweis Micro-cap's long position.| Highland Long/short vs. Ab Value Fund | Highland Long/short vs. Balanced Fund Investor | Highland Long/short vs. Rbb Fund | Highland Long/short vs. Omni Small Cap Value |
| Oberweis Micro-cap vs. Barings Emerging Markets | Oberweis Micro-cap vs. Mondrian Emerging Markets | Oberweis Micro-cap vs. Angel Oak Multi Strategy | Oberweis Micro-cap vs. Shelton Emerging Markets |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |