Correlation Between Oberweis Micro-cap and Oberweis Small-cap
Can any of the company-specific risk be diversified away by investing in both Oberweis Micro-cap and Oberweis Small-cap 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 Small-cap 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 Small Cap Opportunities, you can compare the effects of market volatilities on Oberweis Micro-cap and Oberweis Small-cap 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 Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Micro-cap and Oberweis Small-cap.
Diversification Opportunities for Oberweis Micro-cap and Oberweis Small-cap
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oberweis and Oberweis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Micro Cap Fund 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 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 Small-cap. 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 Micro-cap i.e., Oberweis Micro-cap and Oberweis Small-cap go up and down completely randomly.
Pair Corralation between Oberweis Micro-cap and Oberweis Small-cap
Assuming the 90 days horizon Oberweis Micro Cap Fund is expected to generate 1.13 times more return on investment than Oberweis Small-cap. However, Oberweis Micro-cap is 1.13 times more volatile than Oberweis Small Cap Opportunities. It trades about 0.07 of its potential returns per unit of risk. Oberweis Small Cap Opportunities is currently generating about 0.06 per unit of risk. If you would invest 3,252 in Oberweis Micro Cap Fund on August 30, 2024 and sell it today you would earn a total of 1,676 from holding Oberweis Micro Cap Fund or generate 51.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oberweis Micro Cap Fund vs. Oberweis Small Cap Opportuniti
Performance |
| Timeline |
| Oberweis Micro Cap |
| Oberweis Small Cap |
Oberweis Micro-cap and Oberweis Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oberweis Micro-cap and Oberweis Small-cap
The main advantage of trading using opposite Oberweis Micro-cap and Oberweis Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis Micro-cap position performs unexpectedly, Oberweis Small-cap 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-cap will offset losses from the drop in Oberweis Small-cap'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 Small-cap vs. T Rowe Price | Oberweis Small-cap vs. T Rowe Price | Oberweis Small-cap vs. Fidelity Small Cap | Oberweis Small-cap vs. Virtus Kar 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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