Correlation Between Schwartz Value and Oberweis Micro

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

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

Diversification Opportunities for Schwartz Value and Oberweis Micro

0.9

Correlation Coefficient

Schwartz Value  Oberweis Micro

Almost no diversification

The 3 months correlation between Schwartz and Oberweis is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Schwartz Value Focused and Oberweis Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Micro Cap and Schwartz Value 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 Schwartz Value Focused are associated (or correlated) with Oberweis Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Micro Cap has no effect on the direction of Schwartz Value i.e., Schwartz Value and Oberweis Micro go up and down completely randomly.

Pair Corralation between Schwartz Value and Oberweis Micro

Assuming the 90 days horizon Schwartz Value is expected to generate 1.19 times less return on investment than Oberweis Micro. But when comparing it to its historical volatility, Schwartz Value Focused is 1.16 times less risky than Oberweis Micro. It trades about 0.06 of its potential returns per unit of risk. Oberweis Micro Cap Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,127  in Oberweis Micro Cap Fund on September 22, 2024 and sell it today you would earn a total of  1,482  from holding Oberweis Micro Cap Fund or generate 47.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Schwartz Value Focused  vs.  Oberweis Micro Cap Fund

Schwartz Value Focused

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Schwartz Value Focused are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Schwartz Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oberweis Micro Cap

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis Micro Cap Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Oberweis Micro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Schwartz Value and Oberweis Micro

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

The idea behind Schwartz Value Focused and Oberweis Micro Cap Fund 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.