Correlation Between Oberweis Micro-cap and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Oberweis Micro-cap and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Oberweis Micro-cap and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Micro-cap and Dow Jones.
Diversification Opportunities for Oberweis Micro-cap and Dow Jones
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oberweis and Dow is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Micro Cap Fund and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Oberweis Micro-cap i.e., Oberweis Micro-cap and Dow Jones go up and down completely randomly.
Pair Corralation between Oberweis Micro-cap and Dow Jones
Assuming the 90 days horizon Oberweis Micro Cap Fund is expected to generate 1.66 times more return on investment than Dow Jones. However, Oberweis Micro-cap is 1.66 times more volatile than Dow Jones Industrial. It trades about 0.28 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of risk. If you would invest 4,388 in Oberweis Micro Cap Fund on August 26, 2024 and sell it today you would earn a total of 436.00 from holding Oberweis Micro Cap Fund or generate 9.94% 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. Dow Jones Industrial
Performance |
| Timeline |
Oberweis Micro-cap and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Oberweis Micro Cap Fund
Pair trading matchups for Oberweis Micro-cap
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Oberweis Micro-cap and Dow Jones
The main advantage of trading using opposite Oberweis Micro-cap and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis Micro-cap position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |