Correlation Between Oracle and Baidu
Can any of the company-specific risk be diversified away by investing in both Oracle and Baidu 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 Baidu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Baidu Inc, you can compare the effects of market volatilities on Oracle and Baidu 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 Baidu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Baidu.
Diversification Opportunities for Oracle and Baidu
Very good diversification
The 3 months correlation between Oracle and Baidu is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Baidu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baidu Inc 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 Baidu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baidu Inc has no effect on the direction of Oracle i.e., Oracle and Baidu go up and down completely randomly.
Pair Corralation between Oracle and Baidu
Given the investment horizon of 90 days Oracle is expected to generate 0.5 times more return on investment than Baidu. However, Oracle is 2.01 times less risky than Baidu. It trades about 0.05 of its potential returns per unit of risk. Baidu Inc is currently generating about -0.07 per unit of risk. If you would invest 16,589 in Oracle on November 4, 2024 and sell it today you would earn a total of 417.00 from holding Oracle or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Oracle vs. Baidu Inc
Performance |
| Timeline |
| Oracle |
| Baidu Inc |
Oracle and Baidu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Baidu
The main advantage of trading using opposite Oracle and Baidu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Baidu 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 Baidu will offset losses from the drop in Baidu's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Adobe Systems Incorporated |
| Baidu vs. Prosus | Baidu vs. Kuaishou Technology | Baidu vs. Kuaishou Technology | Baidu vs. Tencent Music Entertainment |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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