Correlation Between Jacob Internet and Oberweis Small-cap
Can any of the company-specific risk be diversified away by investing in both Jacob Internet and Oberweis Small-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 Jacob Internet and Oberweis Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacob Internet Fund and Oberweis Small Cap Opportunities, you can compare the effects of market volatilities on Jacob Internet and Oberweis Small-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 Jacob Internet with a short position of Oberweis Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacob Internet and Oberweis Small-cap.
Diversification Opportunities for Jacob Internet and Oberweis Small-cap
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacob and Oberweis is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Internet Fund 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 Jacob Internet 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 Jacob Internet Fund are associated (or correlated) with Oberweis Small-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 Small Cap has no effect on the direction of Jacob Internet i.e., Jacob Internet and Oberweis Small-cap go up and down completely randomly.
Pair Corralation between Jacob Internet and Oberweis Small-cap
Assuming the 90 days horizon Jacob Internet Fund is expected to generate 1.15 times more return on investment than Oberweis Small-cap. However, Jacob Internet is 1.15 times more volatile than Oberweis Small Cap Opportunities. It trades about 0.44 of its potential returns per unit of risk. Oberweis Small Cap Opportunities is currently generating about 0.1 per unit of risk. If you would invest 500.00 in Jacob Internet Fund on August 29, 2024 and sell it today you would earn a total of 96.00 from holding Jacob Internet Fund or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacob Internet Fund vs. Oberweis Small Cap Opportuniti
Performance |
| Timeline |
| Jacob Internet |
| Oberweis Small Cap |
Jacob Internet and Oberweis Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacob Internet and Oberweis Small-cap
The main advantage of trading using opposite Jacob Internet and Oberweis Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacob Internet position performs unexpectedly, Oberweis Small-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 Small-cap will offset losses from the drop in Oberweis Small-cap's long position.| Jacob Internet vs. Kinetics Internet Fund | Jacob Internet vs. Internet Ultrasector Profund | Jacob Internet vs. Firsthand Technology Opportunities | Jacob Internet vs. Berkshire Focus |
| Oberweis Small-cap vs. T Rowe Price | Oberweis Small-cap vs. T Rowe Price | Oberweis Small-cap vs. Fidelity Small Cap | Oberweis Small-cap vs. Virtus Kar Small Cap |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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