Correlation Between Frontier Markets and Oberweis International
Can any of the company-specific risk be diversified away by investing in both Frontier Markets and Oberweis International 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 Frontier Markets and Oberweis International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Markets Portfolio and Oberweis International Opportunities, you can compare the effects of market volatilities on Frontier Markets and Oberweis International 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 Frontier Markets with a short position of Oberweis International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Markets and Oberweis International.
Diversification Opportunities for Frontier Markets and Oberweis International
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Frontier and Oberweis is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Markets Portfolio and Oberweis International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis International and Frontier Markets 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 Frontier Markets Portfolio are associated (or correlated) with Oberweis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis International has no effect on the direction of Frontier Markets i.e., Frontier Markets and Oberweis International go up and down completely randomly.
Pair Corralation between Frontier Markets and Oberweis International
Assuming the 90 days horizon Frontier Markets Portfolio is expected to generate 0.63 times more return on investment than Oberweis International. However, Frontier Markets Portfolio is 1.59 times less risky than Oberweis International. It trades about 0.03 of its potential returns per unit of risk. Oberweis International Opportunities is currently generating about -0.02 per unit of risk. If you would invest 1,584 in Frontier Markets Portfolio on October 24, 2024 and sell it today you would earn a total of 15.00 from holding Frontier Markets Portfolio or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontier Markets Portfolio vs. Oberweis International Opportu
Performance |
| Timeline |
| Frontier Markets Por |
| Oberweis International |
Frontier Markets and Oberweis International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Markets and Oberweis International
The main advantage of trading using opposite Frontier Markets and Oberweis International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Markets position performs unexpectedly, Oberweis International 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 International will offset losses from the drop in Oberweis International's long position.| Frontier Markets vs. Frontier Markets Portfolio | Frontier Markets vs. Hennessy Japan Fund | Frontier Markets vs. Hennessy Japan Fund | Frontier Markets vs. Hennessy Japan Small |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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