Correlation Between NYSE Composite and Oberweis Small-cap
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite 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 NYSE Composite and Oberweis Small Cap Opportunities, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Oberweis Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Oberweis Small-cap.
Diversification Opportunities for NYSE Composite and Oberweis Small-cap
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Oberweis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Oberweis Small-cap go up and down completely randomly.
Pair Corralation between NYSE Composite and Oberweis Small-cap
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.4 times more return on investment than Oberweis Small-cap. However, NYSE Composite is 2.49 times less risky than Oberweis Small-cap. It trades about 0.26 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 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Oberweis Small Cap Opportuniti
Performance |
| Timeline |
NYSE Composite and Oberweis Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Oberweis Small Cap Opportunities
Pair trading matchups for Oberweis Small-cap
Pair Trading with NYSE Composite and Oberweis Small-cap
The main advantage of trading using opposite NYSE Composite and Oberweis Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| Oberweis Small-cap vs. Ppm High Yield | Oberweis Small-cap vs. Vanguard High Yield Tax Exempt | Oberweis Small-cap vs. Metropolitan West High | Oberweis Small-cap vs. Western Asset High |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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