Correlation Between Oberweis Small-cap and Oberweis China
Can any of the company-specific risk be diversified away by investing in both Oberweis Small-cap and Oberweis China 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 Small-cap and Oberweis China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oberweis Small Cap Opportunities and Oberweis China Opportunities, you can compare the effects of market volatilities on Oberweis Small-cap and Oberweis China 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 Small-cap with a short position of Oberweis China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Small-cap and Oberweis China.
Diversification Opportunities for Oberweis Small-cap and Oberweis China
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oberweis and Oberweis is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Small Cap Opportuniti and Oberweis China Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis China Oppor and Oberweis Small-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 Small Cap Opportunities are associated (or correlated) with Oberweis China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis China Oppor has no effect on the direction of Oberweis Small-cap i.e., Oberweis Small-cap and Oberweis China go up and down completely randomly.
Pair Corralation between Oberweis Small-cap and Oberweis China
Assuming the 90 days horizon Oberweis Small Cap Opportunities is expected to generate 0.91 times more return on investment than Oberweis China. However, Oberweis Small Cap Opportunities is 1.1 times less risky than Oberweis China. It trades about 0.1 of its potential returns per unit of risk. Oberweis China Opportunities is currently generating about -0.17 per unit of risk. If you would invest 2,625 in Oberweis Small Cap Opportunities on August 30, 2024 and sell it today you would earn a total of 82.00 from holding Oberweis Small Cap Opportunities or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oberweis Small Cap Opportuniti vs. Oberweis China Opportunities
Performance |
| Timeline |
| Oberweis Small Cap |
| Oberweis China Oppor |
Oberweis Small-cap and Oberweis China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oberweis Small-cap and Oberweis China
The main advantage of trading using opposite Oberweis Small-cap and Oberweis China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis Small-cap position performs unexpectedly, Oberweis China 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 China will offset losses from the drop in Oberweis China's long position.| 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 |
| Oberweis China vs. Multisector Bond Sma | Oberweis China vs. Versatile Bond Portfolio | Oberweis China vs. Dreyfusstandish Global Fixed | Oberweis China vs. Calamos Dynamic Convertible |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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