Correlation Between Oracle and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both Oracle and IHH Healthcare 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 IHH Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and IHH Healthcare Berhad, you can compare the effects of market volatilities on Oracle and IHH Healthcare 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 IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and IHH Healthcare.
Diversification Opportunities for Oracle and IHH Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oracle and IHH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and IHH Healthcare Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHH Healthcare Berhad 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 IHH Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHH Healthcare Berhad has no effect on the direction of Oracle i.e., Oracle and IHH Healthcare go up and down completely randomly.
Pair Corralation between Oracle and IHH Healthcare
Given the investment horizon of 90 days Oracle is expected to generate 1.25 times more return on investment than IHH Healthcare. However, Oracle is 1.25 times more volatile than IHH Healthcare Berhad. It trades about 0.09 of its potential returns per unit of risk. IHH Healthcare Berhad is currently generating about -0.01 per unit of risk. If you would invest 7,832 in Oracle on September 12, 2024 and sell it today you would earn a total of 9,942 from holding Oracle or generate 126.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 70.51% |
| Values | Daily Returns |
Oracle vs. IHH Healthcare Berhad
Performance |
| Timeline |
| Oracle |
| IHH Healthcare Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Oracle and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and IHH Healthcare
The main advantage of trading using opposite Oracle and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, IHH Healthcare 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 IHH Healthcare will offset losses from the drop in IHH Healthcare'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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