Correlation Between Oberweis Emerging and Oberweis Funds

Can any of the company-specific risk be diversified away by investing in both Oberweis Emerging and Oberweis Funds 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 Oberweis Funds 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 Oberweis Funds , you can compare the effects of market volatilities on Oberweis Emerging and Oberweis Funds 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 Oberweis Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Emerging and Oberweis Funds.

Diversification Opportunities for Oberweis Emerging and Oberweis Funds

-0.66

Correlation Coefficient

Oberweis Emerging  Oberweis Funds

Excellent diversification

The 3 months correlation between Oberweis and Oberweis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Emerging Growth and Oberweis Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Funds 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 Oberweis Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Funds has no effect on the direction of Oberweis Emerging i.e., Oberweis Emerging and Oberweis Funds go up and down completely randomly.

Pair Corralation between Oberweis Emerging and Oberweis Funds

Assuming the 90 days horizon Oberweis Emerging Growth is expected to under-perform the Oberweis Funds. In addition to that, Oberweis Emerging is 1.44 times more volatile than Oberweis Funds . It trades about -0.09 of its total potential returns per unit of risk. Oberweis Funds is currently generating about 0.22 per unit of volatility. If you would invest  971.00  in Oberweis Funds on December 30, 2024 and sell it today you would earn a total of  145.00  from holding Oberweis Funds or generate 14.93% return on investment over 90 days.

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

Oberweis Emerging Growth  vs.  Oberweis Funds

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 forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oberweis Funds

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis Funds are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Oberweis Funds showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oberweis Emerging and Oberweis Funds

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

The idea behind Oberweis Emerging Growth and Oberweis Funds 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.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.