Correlation Between Oberweis Micro-cap and Driehaus Emerging

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

By analyzing existing cross correlation between Oberweis Micro Cap Fund and Driehaus Emerging Markets, you can compare the effects of market volatilities on Oberweis Micro-cap and Driehaus Emerging 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 Micro-cap with a short position of Driehaus Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Micro-cap and Driehaus Emerging.

Diversification Opportunities for Oberweis Micro-cap and Driehaus Emerging

0.0

Correlation Coefficient

Oberweis Micro-cap  Driehaus Emerging

Pay attention - limited upside

The 3 months correlation between Oberweis and Driehaus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Micro Cap Fund and Driehaus Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driehaus Emerging Markets and Oberweis Micro-cap 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 Micro Cap Fund are associated (or correlated) with Driehaus Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driehaus Emerging Markets has no effect on the direction of Oberweis Micro-cap i.e., Oberweis Micro-cap and Driehaus Emerging go up and down completely randomly.

Pair Corralation between Oberweis Micro-cap and Driehaus Emerging

If you would invest  4,207  in Oberweis Micro Cap Fund on September 4, 2024 and sell it today you would earn a total of  730.00  from holding Oberweis Micro Cap Fund or generate 17.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Oberweis Micro Cap Fund  vs.  Driehaus Emerging Markets

Oberweis Micro Cap

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis Micro Cap Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Oberweis Micro-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Driehaus Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Driehaus Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Driehaus Emerging 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 Micro-cap and Driehaus Emerging

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

The idea behind Oberweis Micro Cap Fund and Driehaus Emerging Markets 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.