Correlation Between Oracle and Realites
Can any of the company-specific risk be diversified away by investing in both Oracle and Realites 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 Realites into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Realites, you can compare the effects of market volatilities on Oracle and Realites 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 Realites. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Realites.
Diversification Opportunities for Oracle and Realites
Pay attention - limited upside
The 3 months correlation between Oracle and Realites is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Realites in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realites 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 Realites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realites has no effect on the direction of Oracle i.e., Oracle and Realites go up and down completely randomly.
Pair Corralation between Oracle and Realites
Given the investment horizon of 90 days Oracle is expected to generate 0.32 times more return on investment than Realites. However, Oracle is 3.09 times less risky than Realites. It trades about 0.1 of its potential returns per unit of risk. Realites is currently generating about -0.11 per unit of risk. If you would invest 11,374 in Oracle on September 4, 2024 and sell it today you would earn a total of 6,767 from holding Oracle or generate 59.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Oracle vs. Realites
Performance |
| Timeline |
| Oracle |
| Realites |
Oracle and Realites Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Realites
The main advantage of trading using opposite Oracle and Realites positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Realites 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 Realites will offset losses from the drop in Realites' long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Realites vs. CBO Territoria SA | Realites vs. Bassac | Realites vs. Moulinvest | Realites vs. Piscines Desjoyaux SA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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