Correlation Between Oberweis Emerging and Guggenheim Market

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

By analyzing existing cross correlation between Oberweis Emerging Growth and Guggenheim Market Neutral, you can compare the effects of market volatilities on Oberweis Emerging and Guggenheim Market 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 Oberweis Emerging with a short position of Guggenheim Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Emerging and Guggenheim Market.

Diversification Opportunities for Oberweis Emerging and Guggenheim Market

0.78

Correlation Coefficient

Oberweis Emerging  Guggenheim Market

Poor diversification

The 3 months correlation between Oberweis and Guggenheim is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Emerging Growth and Guggenheim Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Market Neutral and Oberweis Emerging 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 Oberweis Emerging Growth are associated (or correlated) with Guggenheim Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Market Neutral has no effect on the direction of Oberweis Emerging i.e., Oberweis Emerging and Guggenheim Market go up and down completely randomly.

Pair Corralation between Oberweis Emerging and Guggenheim Market

If you would invest  2,264  in Guggenheim Market Neutral on December 23, 2024 and sell it today you would earn a total of  0.00  from holding Guggenheim Market Neutral or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	31.15%
Values	Daily Returns

Oberweis Emerging Growth  vs.  Guggenheim Market Neutral

Oberweis Emerging Growth

Risk-Adjusted Performance

Very Weak

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

Guggenheim Market Neutral

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Oberweis Emerging and Guggenheim Market

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

The idea behind Oberweis Emerging Growth and Guggenheim Market Neutral 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.