Correlation Between Oberweis International and Oberweis Funds

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

Diversification Opportunities for Oberweis International and Oberweis Funds

0.96

Correlation Coefficient

Oberweis International  Oberweis Funds

Almost no diversification

The 3 months correlation between Oberweis and Oberweis is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis International Opportu and Oberweis Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Funds and Oberweis International 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 International Opportunities 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 International i.e., Oberweis International and Oberweis Funds go up and down completely randomly.

Pair Corralation between Oberweis International and Oberweis Funds

Assuming the 90 days horizon Oberweis International is expected to generate 2.46 times less return on investment than Oberweis Funds. But when comparing it to its historical volatility, Oberweis International Opportunities is 1.01 times less risky than Oberweis Funds. It trades about 0.09 of its potential returns per unit of risk. Oberweis Funds is currently generating about 0.22 of returns per unit of risk over similar time horizon. 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 Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Oberweis International Opportu  vs.  Oberweis Funds

Oberweis International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis International Opportunities are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Oberweis International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 International and Oberweis Funds

The main advantage of trading using opposite Oberweis International and Oberweis Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberweis International 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 International Opportunities 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.