Correlation Between Oracle and BioMark Diagnostics
Can any of the company-specific risk be diversified away by investing in both Oracle and BioMark Diagnostics 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 BioMark Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and BioMark Diagnostics, you can compare the effects of market volatilities on Oracle and BioMark Diagnostics 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 BioMark Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and BioMark Diagnostics.
Diversification Opportunities for Oracle and BioMark Diagnostics
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oracle and BioMark is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and BioMark Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioMark Diagnostics 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 BioMark Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioMark Diagnostics has no effect on the direction of Oracle i.e., Oracle and BioMark Diagnostics go up and down completely randomly.
Pair Corralation between Oracle and BioMark Diagnostics
Given the investment horizon of 90 days Oracle is expected to under-perform the BioMark Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, Oracle is 2.45 times less risky than BioMark Diagnostics. The stock trades about -0.02 of its potential returns per unit of risk. The BioMark Diagnostics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14.00 in BioMark Diagnostics on December 3, 2024 and sell it today you would earn a total of 1.00 from holding BioMark Diagnostics or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oracle vs. BioMark Diagnostics
Performance |
| Timeline |
| Oracle |
| BioMark Diagnostics |
Oracle and BioMark Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and BioMark Diagnostics
The main advantage of trading using opposite Oracle and BioMark Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, BioMark Diagnostics 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 BioMark Diagnostics will offset losses from the drop in BioMark Diagnostics' long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Adobe Systems Incorporated |
| BioMark Diagnostics vs. Spectral Med | BioMark Diagnostics vs. bioAffinity Technologies, | BioMark Diagnostics vs. Avricore Health | BioMark Diagnostics vs. DarioHealth Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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