Correlation Between Oberweis Small-cap and Old Westbury

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

By analyzing existing cross correlation between Oberweis Small Cap Opportunities and Old Westbury Municipal, you can compare the effects of market volatilities on Oberweis Small-cap and Old Westbury 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 Small-cap with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberweis Small-cap and Old Westbury.

Diversification Opportunities for Oberweis Small-cap and Old Westbury

-0.22

Correlation Coefficient

Oberweis Small-cap  Old Westbury

Very good diversification

The 3 months correlation between Oberweis and Old is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Oberweis Small Cap Opportuniti and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal and Oberweis Small-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 Small Cap Opportunities are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Oberweis Small-cap i.e., Oberweis Small-cap and Old Westbury go up and down completely randomly.

Pair Corralation between Oberweis Small-cap and Old Westbury

Assuming the 90 days horizon Oberweis Small Cap Opportunities is expected to under-perform the Old Westbury. In addition to that, Oberweis Small-cap is 9.33 times more volatile than Old Westbury Municipal. It trades about -0.09 of its total potential returns per unit of risk. Old Westbury Municipal is currently generating about -0.03 per unit of volatility. If you would invest  1,133  in Old Westbury Municipal on December 28, 2024 and sell it today you would lose (3.00) from holding Old Westbury Municipal or give up 0.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Oberweis Small Cap Opportuniti  vs.  Old Westbury Municipal

Oberweis Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oberweis Small Cap Opportunities 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.

Old Westbury Municipal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Old Westbury Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Old Westbury 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 Small-cap and Old Westbury

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

The idea behind Oberweis Small Cap Opportunities and Old Westbury Municipal 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.