Correlation Between Artisan Global and Oberweis Micro-cap

Can any of the company-specific risk be diversified away by investing in both Artisan Global and Oberweis Micro-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 Artisan Global and Oberweis Micro-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Global Opportunities and Oberweis Micro Cap Fund, you can compare the effects of market volatilities on Artisan Global and Oberweis Micro-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 Artisan Global with a short position of Oberweis Micro-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Global and Oberweis Micro-cap.

Diversification Opportunities for Artisan Global and Oberweis Micro-cap

0.8

Correlation Coefficient

Artisan Global  Oberweis Micro-cap

Very poor diversification

The 3 months correlation between Artisan and Oberweis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Opportunities and Oberweis Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Micro Cap and Artisan Global 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 Artisan Global Opportunities are associated (or correlated) with Oberweis Micro-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 Micro Cap has no effect on the direction of Artisan Global i.e., Artisan Global and Oberweis Micro-cap go up and down completely randomly.

Pair Corralation between Artisan Global and Oberweis Micro-cap

Assuming the 90 days horizon Artisan Global is expected to generate 3.38 times less return on investment than Oberweis Micro-cap. But when comparing it to its historical volatility, Artisan Global Opportunities is 2.08 times less risky than Oberweis Micro-cap. It trades about 0.21 of its potential returns per unit of risk. Oberweis Micro Cap Fund is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  4,459  in Oberweis Micro Cap Fund on September 4, 2024 and sell it today you would earn a total of  478.00  from holding Oberweis Micro Cap Fund or generate 10.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Artisan Global Opportunities  vs.  Oberweis Micro Cap Fund

Artisan Global Oppor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Opportunities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oberweis Micro Cap

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis Micro Cap Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Oberweis Micro-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Global and Oberweis Micro-cap

The main advantage of trading using opposite Artisan Global and Oberweis Micro-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Global position performs unexpectedly, Oberweis Micro-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 Micro-cap will offset losses from the drop in Oberweis Micro-cap's long position.

The idea behind Artisan Global Opportunities and Oberweis Micro Cap Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.