Correlation Between Oracle and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Oracle and Franklin FTSE 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 Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Franklin FTSE Brazil, you can compare the effects of market volatilities on Oracle and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Franklin FTSE.
Diversification Opportunities for Oracle and Franklin FTSE
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oracle and Franklin is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Franklin FTSE Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Brazil 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Brazil has no effect on the direction of Oracle i.e., Oracle and Franklin FTSE go up and down completely randomly.
Pair Corralation between Oracle and Franklin FTSE
Given the investment horizon of 90 days Oracle is expected to generate 1.71 times more return on investment than Franklin FTSE. However, Oracle is 1.71 times more volatile than Franklin FTSE Brazil. It trades about 0.22 of its potential returns per unit of risk. Franklin FTSE Brazil is currently generating about -0.15 per unit of risk. If you would invest 13,919 in Oracle on September 3, 2024 and sell it today you would earn a total of 4,565 from holding Oracle or generate 32.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Oracle vs. Franklin FTSE Brazil
Performance |
| Timeline |
| Oracle |
| Franklin FTSE Brazil |
Oracle and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Franklin FTSE
The main advantage of trading using opposite Oracle and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Franklin FTSE vs. Franklin LibertyQ Global | Franklin FTSE vs. Franklin Libertyshares ICAV | Franklin FTSE vs. Franklin FTSE Asia | Franklin FTSE vs. Franklin LibertyQ AC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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