Correlation Between Oracle and Intel
Can any of the company-specific risk be diversified away by investing in both Oracle and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Intel, you can compare the effects of market volatilities on Oracle and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Intel.
Diversification Opportunities for Oracle and Intel
Very poor diversification
The 3 months correlation between Oracle and Intel is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Oracle i.e., Oracle and Intel go up and down completely randomly.
Pair Corralation between Oracle and Intel
Given the investment horizon of 90 days Oracle is expected to generate 2.23 times less return on investment than Intel. But when comparing it to its historical volatility, Oracle is 1.65 times less risky than Intel. It trades about 0.17 of its potential returns per unit of risk. Intel is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,040 in Intel on September 4, 2024 and sell it today you would earn a total of 343.00 from holding Intel or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oracle vs. Intel
Performance |
| Timeline |
| Oracle |
| Intel |
Oracle and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Intel
The main advantage of trading using opposite Oracle and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Intel vs. Hochschild Mining plc | Intel vs. ANGLER GAMING PLC | Intel vs. PARKEN Sport Entertainment | Intel vs. Seven West Media |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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