Correlation Between Oberweis Emerging and Oberweis Small
Can any of the company-specific risk be diversified away by investing in both Oberweis Emerging and Oberweis Small 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 Oberweis Emerging and Oberweis Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oberweis Emerging Growth and Oberweis Small Cap Opportunities, you can compare the effects of market volatilities on Oberweis Emerging and Oberweis Small 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 Oberweis Emerging with a short position of Oberweis Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Emerging and Oberweis Small.
Diversification Opportunities for Oberweis Emerging and Oberweis Small
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oberweis and Oberweis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Emerging Growth 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 Oberweis Emerging 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 Oberweis Emerging Growth are associated (or correlated) with Oberweis Small. 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 Oberweis Emerging i.e., Oberweis Emerging and Oberweis Small go up and down completely randomly.
Pair Corralation between Oberweis Emerging and Oberweis Small
Assuming the 90 days horizon Oberweis Emerging is expected to generate 1.2 times less return on investment than Oberweis Small. But when comparing it to its historical volatility, Oberweis Emerging Growth is 1.02 times less risky than Oberweis Small. It trades about 0.08 of its potential returns per unit of risk. Oberweis Small Cap Opportunities is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,069 in Oberweis Small Cap Opportunities on August 26, 2024 and sell it today you would earn a total of 632.00 from holding Oberweis Small Cap Opportunities or generate 30.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oberweis Emerging Growth vs. Oberweis Small Cap Opportuniti
Performance |
| Timeline |
| Oberweis Emerging Growth |
| Oberweis Small Cap |
Oberweis Emerging and Oberweis Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oberweis Emerging and Oberweis Small
The main advantage of trading using opposite Oberweis Emerging and Oberweis Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis Emerging position performs unexpectedly, Oberweis Small 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 will offset losses from the drop in Oberweis Small's long position.The idea behind Oberweis Emerging Growth and Oberweis Small Cap Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Oberweis Small vs. Oberweis Emerging Growth | Oberweis Small vs. Oberweis International Opportunities | Oberweis Small vs. Needham Aggressive Growth | Oberweis Small vs. Kinetics 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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