Correlation Between Oracle and Immersion
Can any of the company-specific risk be diversified away by investing in both Oracle and Immersion 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 Immersion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Immersion, you can compare the effects of market volatilities on Oracle and Immersion 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 Immersion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Immersion.
Diversification Opportunities for Oracle and Immersion
Excellent diversification
The 3 months correlation between Oracle and Immersion is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Immersion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immersion 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 Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immersion has no effect on the direction of Oracle i.e., Oracle and Immersion go up and down completely randomly.
Pair Corralation between Oracle and Immersion
Given the investment horizon of 90 days Oracle is expected to generate 0.75 times more return on investment than Immersion. However, Oracle is 1.34 times less risky than Immersion. It trades about 0.11 of its potential returns per unit of risk. Immersion is currently generating about 0.06 per unit of risk. If you would invest 11,484 in Oracle on August 24, 2024 and sell it today you would earn a total of 7,760 from holding Oracle or generate 67.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oracle vs. Immersion
Performance |
| Timeline |
| Oracle |
| Immersion |
Oracle and Immersion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Immersion
The main advantage of trading using opposite Oracle and Immersion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Immersion 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 Immersion will offset losses from the drop in Immersion's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Immersion vs. Meridianlink | Immersion vs. CoreCard Corp | Immersion vs. Enfusion | Immersion vs. Alkami Technology |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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