Correlation Between Oberweis International and Virtus International

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

Diversification Opportunities for Oberweis International and Virtus International

0.95

Correlation Coefficient

Oberweis International  Virtus International

Almost no diversification

The 3 months correlation between Oberweis and VIRTUS is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis International Opportu and Virtus International Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus International 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 Virtus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus International has no effect on the direction of Oberweis International i.e., Oberweis International and Virtus International go up and down completely randomly.

Pair Corralation between Oberweis International and Virtus International

Assuming the 90 days horizon Oberweis International is expected to generate 1.2 times less return on investment than Virtus International. In addition to that, Oberweis International is 1.17 times more volatile than Virtus International Small Cap. It trades about 0.12 of its total potential returns per unit of risk. Virtus International Small Cap is currently generating about 0.17 per unit of volatility. If you would invest  1,849  in Virtus International Small Cap on December 21, 2024 and sell it today you would earn a total of  169.00  from holding Virtus International Small Cap or generate 9.14% 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.  Virtus International Small Cap

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 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Oberweis International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Virtus International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus International Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Virtus International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Oberweis International and Virtus International

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

The idea behind Oberweis International Opportunities and Virtus International Small Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.