Correlation Between Oberweis Micro-cap and Oberweis Emerging
Can any of the company-specific risk be diversified away by investing in both Oberweis Micro-cap 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-cap 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-cap 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-cap with a short position of Oberweis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Micro-cap and Oberweis Emerging.
Diversification Opportunities for Oberweis Micro-cap and Oberweis Emerging
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oberweis and Oberweis is 0.71. 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-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 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-cap i.e., Oberweis Micro-cap and Oberweis Emerging go up and down completely randomly.
Pair Corralation between Oberweis Micro-cap and Oberweis Emerging
Assuming the 90 days horizon Oberweis Micro Cap Fund is expected to generate 1.1 times more return on investment than Oberweis Emerging. However, Oberweis Micro-cap is 1.1 times more volatile than Oberweis Emerging Growth. It trades about 0.31 of its potential returns per unit of risk. Oberweis Emerging Growth is currently generating about 0.07 per unit of risk. If you would invest 4,442 in Oberweis Micro Cap Fund on August 30, 2024 and sell it today you would earn a total of 486.00 from holding Oberweis Micro Cap Fund or generate 10.94% 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-cap and Oberweis Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oberweis Micro-cap and Oberweis Emerging
The main advantage of trading using opposite Oberweis Micro-cap and Oberweis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis Micro-cap 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-cap vs. Putnam Equity Income | Oberweis Micro-cap vs. Putnam Growth Opportunities | Oberweis Micro-cap vs. HUMANA INC | Oberweis Micro-cap vs. Aquagold International |
| Oberweis Emerging vs. Locorr Longshort Modities | Oberweis Emerging vs. Calvert Short Duration | Oberweis Emerging vs. Touchstone Ultra Short | Oberweis Emerging vs. Astor Longshort Fund |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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