Correlation Between Vanguard 500 and Oberweis Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 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 Vanguard 500 and Oberweis Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard 500 Index and Oberweis Emerging Markets, you can compare the effects of market volatilities on Vanguard 500 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 Vanguard 500 with a short position of Oberweis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Oberweis Emerging.
Diversification Opportunities for Vanguard 500 and Oberweis Emerging
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Oberweis is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Oberweis Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Emerging Markets and Vanguard 500 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 Vanguard 500 Index 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 Markets has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Oberweis Emerging go up and down completely randomly.
Pair Corralation between Vanguard 500 and Oberweis Emerging
Assuming the 90 days horizon Vanguard 500 Index is expected to generate 0.38 times more return on investment than Oberweis Emerging. However, Vanguard 500 Index is 2.61 times less risky than Oberweis Emerging. It trades about 0.13 of its potential returns per unit of risk. Oberweis Emerging Markets is currently generating about -0.05 per unit of risk. If you would invest 48,568 in Vanguard 500 Index on September 1, 2024 and sell it today you would earn a total of 7,211 from holding Vanguard 500 Index or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Vanguard 500 Index vs. Oberweis Emerging Markets
Performance |
| Timeline |
| Vanguard 500 Index |
| Oberweis Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard 500 and Oberweis Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard 500 and Oberweis Emerging
The main advantage of trading using opposite Vanguard 500 and Oberweis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 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.| Vanguard 500 vs. Vanguard Total Bond | Vanguard 500 vs. Vanguard Small Cap Index | Vanguard 500 vs. Vanguard Mid Cap Index | Vanguard 500 vs. Vanguard Extended Market |
| Oberweis Emerging vs. Oberweis Micro Cap Fund | Oberweis Emerging vs. Wasatch Emerging India | Oberweis Emerging vs. Driehaus Emerging Markets | Oberweis Emerging vs. Wasatch Emerging Markets |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |