Correlation Between Oracle and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Oracle and Ferronordic 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 Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Ferronordic AB, you can compare the effects of market volatilities on Oracle and Ferronordic 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 Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Ferronordic.
Diversification Opportunities for Oracle and Ferronordic
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oracle and Ferronordic is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB 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 Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Oracle i.e., Oracle and Ferronordic go up and down completely randomly.
Pair Corralation between Oracle and Ferronordic
Given the investment horizon of 90 days Oracle is expected to generate 0.97 times more return on investment than Ferronordic. However, Oracle is 1.04 times less risky than Ferronordic. It trades about 0.16 of its potential returns per unit of risk. Ferronordic AB is currently generating about -0.03 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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Oracle vs. Ferronordic AB
Performance |
| Timeline |
| Oracle |
| Ferronordic AB |
Oracle and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Ferronordic
The main advantage of trading using opposite Oracle and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Ferronordic vs. 24SevenOffice Scandinavia AB | Ferronordic vs. High Coast Distillery | Ferronordic vs. Nexam Chemical Holding | Ferronordic vs. Nitro Games Oyj |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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