Correlation Between Needham Growth and Oberweis Micro-cap
Can any of the company-specific risk be diversified away by investing in both Needham Growth 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 Needham Growth 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 Needham Growth Fund and Oberweis Micro Cap Fund, you can compare the effects of market volatilities on Needham Growth 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 Needham Growth with a short position of Oberweis Micro-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Growth and Oberweis Micro-cap.
Diversification Opportunities for Needham Growth and Oberweis Micro-cap
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Needham and Oberweis is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Needham Growth Fund 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 Needham Growth 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 Needham Growth Fund 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 Needham Growth i.e., Needham Growth and Oberweis Micro-cap go up and down completely randomly.
Pair Corralation between Needham Growth and Oberweis Micro-cap
Assuming the 90 days horizon Needham Growth Fund is expected to under-perform the Oberweis Micro-cap. In addition to that, Needham Growth is 1.08 times more volatile than Oberweis Micro Cap Fund. It trades about -0.14 of its total potential returns per unit of risk. Oberweis Micro Cap Fund is currently generating about -0.12 per unit of volatility. If you would invest 4,504 in Oberweis Micro Cap Fund on December 30, 2024 and sell it today you would lose (552.00) from holding Oberweis Micro Cap Fund or give up 12.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Needham Growth Fund vs. Oberweis Micro Cap Fund
Performance |
Timeline |
Needham Growth |
Oberweis Micro Cap |
Needham Growth and Oberweis Micro-cap Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Needham Growth and Oberweis Micro-cap
The main advantage of trading using opposite Needham Growth and Oberweis Micro-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Growth 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.Needham Growth vs. Needham Aggressive Growth | Needham Growth vs. Needham Small Cap | Needham Growth vs. Aggressive Investors 1 | Needham Growth vs. Meridian Trarian Fund |
Oberweis Micro-cap vs. Oberweis Emerging Growth | Oberweis Micro-cap vs. Oberweis Small Cap Opportunities | Oberweis Micro-cap vs. Ultra Small Pany Fund | Oberweis Micro-cap vs. Perritt Microcap Opportunities |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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