Correlation Between Oracle and Ascelia Pharma
Can any of the company-specific risk be diversified away by investing in both Oracle and Ascelia Pharma 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 Oracle and Ascelia Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Ascelia Pharma AB, you can compare the effects of market volatilities on Oracle and Ascelia Pharma 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 Oracle with a short position of Ascelia Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Ascelia Pharma.
Diversification Opportunities for Oracle and Ascelia Pharma
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oracle and Ascelia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB and Oracle 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 Oracle are associated (or correlated) with Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of Oracle i.e., Oracle and Ascelia Pharma go up and down completely randomly.
Pair Corralation between Oracle and Ascelia Pharma
Given the investment horizon of 90 days Oracle is expected to generate 18.51 times less return on investment than Ascelia Pharma. But when comparing it to its historical volatility, Oracle is 2.19 times less risky than Ascelia Pharma. It trades about 0.03 of its potential returns per unit of risk. Ascelia Pharma AB is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 265.00 in Ascelia Pharma AB on September 12, 2024 and sell it today you would earn a total of 51.00 from holding Ascelia Pharma AB or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oracle vs. Ascelia Pharma AB
Performance |
| Timeline |
| Oracle |
| Ascelia Pharma AB |
Oracle and Ascelia Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Ascelia Pharma
The main advantage of trading using opposite Oracle and Ascelia Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Ascelia Pharma 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 Ascelia Pharma will offset losses from the drop in Ascelia Pharma's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Ascelia Pharma vs. Hansa Biopharma AB | Ascelia Pharma vs. Cantargia AB | Ascelia Pharma vs. Saniona AB | Ascelia Pharma vs. BioArctic AB |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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