Correlation Between International Advantage and Oberweis International

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

By analyzing existing cross correlation between International Advantage Portfolio and Oberweis International Opportunities, you can compare the effects of market volatilities on International Advantage and Oberweis International 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 International Advantage with a short position of Oberweis International. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Advantage and Oberweis International.

Diversification Opportunities for International Advantage and Oberweis International

0.65

Correlation Coefficient

International Advantage  Oberweis International

Poor diversification

The 3 months correlation between International and Oberweis is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding International Advantage Portfo and Oberweis International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis International and International Advantage 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 International Advantage Portfolio are associated (or correlated) with Oberweis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis International has no effect on the direction of International Advantage i.e., International Advantage and Oberweis International go up and down completely randomly.

Pair Corralation between International Advantage and Oberweis International

Assuming the 90 days horizon International Advantage Portfolio is expected to generate 1.25 times more return on investment than Oberweis International. However, International Advantage is 1.25 times more volatile than Oberweis International Opportunities. It trades about -0.08 of its potential returns per unit of risk. Oberweis International Opportunities is currently generating about -0.32 per unit of risk. If you would invest  2,409  in International Advantage Portfolio on October 11, 2024 and sell it today you would lose (39.00) from holding International Advantage Portfolio or give up 1.62% of portfolio value over 90 days.

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

International Advantage Portfo  vs.  Oberweis International Opportu

International Advantage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Advantage Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, International Advantage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oberweis International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oberweis International Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with International Advantage and Oberweis International

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

The idea behind International Advantage Portfolio and Oberweis International 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.