Correlation Between Oracle and AJ LUCAS
Can any of the company-specific risk be diversified away by investing in both Oracle and AJ LUCAS 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 AJ LUCAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and AJ LUCAS GROUP, you can compare the effects of market volatilities on Oracle and AJ LUCAS 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 AJ LUCAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and AJ LUCAS.
Diversification Opportunities for Oracle and AJ LUCAS
Very good diversification
The 3 months correlation between Oracle and FW9 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and AJ LUCAS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ LUCAS GROUP 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 AJ LUCAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ LUCAS GROUP has no effect on the direction of Oracle i.e., Oracle and AJ LUCAS go up and down completely randomly.
Pair Corralation between Oracle and AJ LUCAS
Given the investment horizon of 90 days Oracle is expected to generate 11.17 times less return on investment than AJ LUCAS. But when comparing it to its historical volatility, Oracle is 11.67 times less risky than AJ LUCAS. It trades about 0.07 of its potential returns per unit of risk. AJ LUCAS GROUP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.60 in AJ LUCAS GROUP on September 4, 2024 and sell it today you would lose (0.55) from holding AJ LUCAS GROUP or give up 91.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.16% |
| Values | Daily Returns |
Oracle vs. AJ LUCAS GROUP
Performance |
| Timeline |
| Oracle |
| AJ LUCAS GROUP |
Oracle and AJ LUCAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and AJ LUCAS
The main advantage of trading using opposite Oracle and AJ LUCAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, AJ LUCAS 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 AJ LUCAS will offset losses from the drop in AJ LUCAS's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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