Correlation Between Oracle and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Oracle and IShares Trust 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 IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and iShares Trust, you can compare the effects of market volatilities on Oracle and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and IShares Trust.
Diversification Opportunities for Oracle and IShares Trust
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oracle and IShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Oracle i.e., Oracle and IShares Trust go up and down completely randomly.
Pair Corralation between Oracle and IShares Trust
Given the investment horizon of 90 days Oracle is expected to generate 5.11 times more return on investment than IShares Trust. However, Oracle is 5.11 times more volatile than iShares Trust. It trades about 0.25 of its potential returns per unit of risk. iShares Trust is currently generating about 0.29 per unit of risk. If you would invest 16,959 in Oracle on September 5, 2024 and sell it today you would earn a total of 1,860 from holding Oracle or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Oracle vs. iShares Trust
Performance |
| Timeline |
| Oracle |
| iShares Trust |
Oracle and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and IShares Trust
The main advantage of trading using opposite Oracle and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| IShares Trust vs. Vanguard Total Stock | IShares Trust vs. SPDR SP 500 | IShares Trust vs. Vanguard Total Bond | IShares Trust vs. Vanguard Value Index |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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