Correlation Between Oracle and CIBC Flexible
Can any of the company-specific risk be diversified away by investing in both Oracle and CIBC Flexible 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 CIBC Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and CIBC Flexible Yield, you can compare the effects of market volatilities on Oracle and CIBC Flexible 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 CIBC Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and CIBC Flexible.
Diversification Opportunities for Oracle and CIBC Flexible
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oracle and CIBC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and CIBC Flexible Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Flexible Yield 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 CIBC Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Flexible Yield has no effect on the direction of Oracle i.e., Oracle and CIBC Flexible go up and down completely randomly.
Pair Corralation between Oracle and CIBC Flexible
Given the investment horizon of 90 days Oracle is expected to generate 9.16 times more return on investment than CIBC Flexible. However, Oracle is 9.16 times more volatile than CIBC Flexible Yield. It trades about 0.17 of its potential returns per unit of risk. CIBC Flexible Yield is currently generating about 0.14 per unit of risk. If you would invest 16,959 in Oracle on September 4, 2024 and sell it today you would earn a total of 1,182 from holding Oracle or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oracle vs. CIBC Flexible Yield
Performance |
| Timeline |
| Oracle |
| CIBC Flexible Yield |
Oracle and CIBC Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and CIBC Flexible
The main advantage of trading using opposite Oracle and CIBC Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, CIBC Flexible 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 CIBC Flexible will offset losses from the drop in CIBC Flexible's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| CIBC Flexible vs. First Asset Energy | CIBC Flexible vs. First Asset Tech | CIBC Flexible vs. Harvest Equal Weight | CIBC Flexible vs. CI Canada Lifeco |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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