Correlation Between Oberweis Micro and Oberweis Emerging
Can any of the company-specific risk be diversified away by investing in both Oberweis Micro and Oberweis Emerging 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 and Oberweis Emerging 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 Oberweis Emerging Growth, you can compare the effects of market volatilities on Oberweis Micro and Oberweis Emerging 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 with a short position of Oberweis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Micro and Oberweis Emerging.
Diversification Opportunities for Oberweis Micro and Oberweis Emerging
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oberweis and Oberweis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Micro Cap Fund and Oberweis Emerging Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Emerging Growth and Oberweis Micro 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 Oberweis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Emerging Growth has no effect on the direction of Oberweis Micro i.e., Oberweis Micro and Oberweis Emerging go up and down completely randomly.
Pair Corralation between Oberweis Micro and Oberweis Emerging
Assuming the 90 days horizon Oberweis Micro is expected to generate 2.23 times less return on investment than Oberweis Emerging. In addition to that, Oberweis Micro is 1.14 times more volatile than Oberweis Emerging Growth. It trades about 0.02 of its total potential returns per unit of risk. Oberweis Emerging Growth is currently generating about 0.05 per unit of volatility. If you would invest 2,971 in Oberweis Emerging Growth on October 19, 2024 and sell it today you would earn a total of 66.00 from holding Oberweis Emerging Growth or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oberweis Micro Cap Fund vs. Oberweis Emerging Growth
Performance |
| Timeline |
| Oberweis Micro Cap |
| Oberweis Emerging Growth |
Oberweis Micro and Oberweis Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oberweis Micro and Oberweis Emerging
The main advantage of trading using opposite Oberweis Micro and Oberweis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis Micro position performs unexpectedly, Oberweis Emerging 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 Emerging will offset losses from the drop in Oberweis Emerging's long position.| Oberweis Micro vs. Oberweis Emerging Growth | Oberweis Micro vs. Oberweis Small Cap Opportunities | Oberweis Micro vs. Ultra Small Pany Fund | Oberweis Micro vs. Perritt Microcap Opportunities |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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