Correlation Between Oberweis Micro-cap and Ultra-small Company
Can any of the company-specific risk be diversified away by investing in both Oberweis Micro-cap and Ultra-small Company 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 Micro-cap and Ultra-small Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oberweis Micro Cap Fund and Ultra Small Pany Market, you can compare the effects of market volatilities on Oberweis Micro-cap and Ultra-small Company 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 Micro-cap with a short position of Ultra-small Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Micro-cap and Ultra-small Company.
Diversification Opportunities for Oberweis Micro-cap and Ultra-small Company
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oberweis and ULTRA-SMALL is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Micro Cap Fund and Ultra Small Pany Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra-small Company and Oberweis Micro-cap 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 Micro Cap Fund are associated (or correlated) with Ultra-small Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra-small Company has no effect on the direction of Oberweis Micro-cap i.e., Oberweis Micro-cap and Ultra-small Company go up and down completely randomly.
Pair Corralation between Oberweis Micro-cap and Ultra-small Company
Assuming the 90 days horizon Oberweis Micro Cap Fund is expected to generate 0.92 times more return on investment than Ultra-small Company. However, Oberweis Micro Cap Fund is 1.09 times less risky than Ultra-small Company. It trades about 0.31 of its potential returns per unit of risk. Ultra Small Pany Market is currently generating about 0.26 per unit of risk. If you would invest 4,432 in Oberweis Micro Cap Fund on August 28, 2024 and sell it today you would earn a total of 462.00 from holding Oberweis Micro Cap Fund or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oberweis Micro Cap Fund vs. Ultra Small Pany Market
Performance |
| Timeline |
| Oberweis Micro Cap |
| Ultra-small Company |
Oberweis Micro-cap and Ultra-small Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oberweis Micro-cap and Ultra-small Company
The main advantage of trading using opposite Oberweis Micro-cap and Ultra-small Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis Micro-cap position performs unexpectedly, Ultra-small Company 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 Ultra-small Company will offset losses from the drop in Ultra-small Company's long position.| Oberweis Micro-cap vs. Oberweis Emerging Growth | Oberweis Micro-cap vs. Oberweis International Opportunities | Oberweis Micro-cap vs. Needham Aggressive Growth | Oberweis Micro-cap vs. Kinetics Small Cap |
| Ultra-small Company vs. Ultra Small Pany Fund | Ultra-small Company vs. Small Cap Value Fund | Ultra-small Company vs. Aggressive Investors 1 | Ultra-small Company vs. American Beacon Bridgeway |
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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