Correlation Between Chartwell Short and Oberweis Small-cap

Can any of the company-specific risk be diversified away by investing in both Chartwell Short 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 Chartwell Short 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 Chartwell Short Duration and Oberweis Small Cap Opportunities, you can compare the effects of market volatilities on Chartwell Short 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 Chartwell Short with a short position of Oberweis Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Short and Oberweis Small-cap.

Diversification Opportunities for Chartwell Short and Oberweis Small-cap

0.26

Correlation Coefficient

Chartwell Short  Oberweis Small-cap

Modest diversification

The 3 months correlation between Chartwell and Oberweis is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Short Duration 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 Chartwell Short 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 Chartwell Short Duration 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 Chartwell Short i.e., Chartwell Short and Oberweis Small-cap go up and down completely randomly.

Pair Corralation between Chartwell Short and Oberweis Small-cap

Assuming the 90 days horizon Chartwell Short is expected to generate 4.15 times less return on investment than Oberweis Small-cap. But when comparing it to its historical volatility, Chartwell Short Duration is 12.14 times less risky than Oberweis Small-cap. It trades about 0.2 of its potential returns per unit of risk. Oberweis Small Cap Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,663  in Oberweis Small Cap Opportunities on October 24, 2024 and sell it today you would earn a total of  132.00  from holding Oberweis Small Cap Opportunities or generate 4.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Chartwell Short Duration  vs.  Oberweis Small Cap Opportuniti

Chartwell Short Duration

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Short Duration are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chartwell Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oberweis Small Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis Small Cap Opportunities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Oberweis Small-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chartwell Short and Oberweis Small-cap

The main advantage of trading using opposite Chartwell Short and Oberweis Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Short 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.

The idea behind Chartwell Short Duration and Oberweis Small Cap Opportunities 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.