Correlation Between Oracle and Bundamedik Tbk

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Can any of the company-specific risk be diversified away by investing in both Oracle and Bundamedik Tbk 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 Bundamedik Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Bundamedik Tbk PT, you can compare the effects of market volatilities on Oracle and Bundamedik Tbk 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 Bundamedik Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Bundamedik Tbk.

Diversification Opportunities for Oracle and Bundamedik Tbk

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Oracle and Bundamedik is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Bundamedik Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bundamedik Tbk PT 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 Bundamedik Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bundamedik Tbk PT has no effect on the direction of Oracle i.e., Oracle and Bundamedik Tbk go up and down completely randomly.

Pair Corralation between Oracle and Bundamedik Tbk

Given the investment horizon of 90 days Oracle is expected to generate 0.68 times more return on investment than Bundamedik Tbk. However, Oracle is 1.47 times less risky than Bundamedik Tbk. It trades about 0.16 of its potential returns per unit of risk. Bundamedik Tbk PT is currently generating about -0.06 per unit of risk. If you would invest  16,102  in Oracle on September 12, 2024 and sell it today you would earn a total of  2,943  from holding Oracle or generate 18.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.41%
ValuesDaily Returns

Oracle  vs.  Bundamedik Tbk PT

 Performance 
       Timeline  
Oracle 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental indicators, Oracle disclosed solid returns over the last few months and may actually be approaching a breakup point.
Bundamedik Tbk PT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bundamedik Tbk PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Oracle and Bundamedik Tbk Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oracle and Bundamedik Tbk

The main advantage of trading using opposite Oracle and Bundamedik Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Bundamedik Tbk 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 Bundamedik Tbk will offset losses from the drop in Bundamedik Tbk's long position.
The idea behind Oracle and Bundamedik Tbk PT 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.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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