Correlation Between Oracle and ENEOS Holdings
Can any of the company-specific risk be diversified away by investing in both Oracle and ENEOS Holdings 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 ENEOS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and ENEOS Holdings, you can compare the effects of market volatilities on Oracle and ENEOS Holdings 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 ENEOS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and ENEOS Holdings.
Diversification Opportunities for Oracle and ENEOS Holdings
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oracle and ENEOS is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and ENEOS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEOS Holdings 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 ENEOS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEOS Holdings has no effect on the direction of Oracle i.e., Oracle and ENEOS Holdings go up and down completely randomly.
Pair Corralation between Oracle and ENEOS Holdings
Given the investment horizon of 90 days Oracle is expected to generate 0.71 times more return on investment than ENEOS Holdings. However, Oracle is 1.4 times less risky than ENEOS Holdings. It trades about 0.12 of its potential returns per unit of risk. ENEOS Holdings is currently generating about 0.06 per unit of risk. If you would invest 10,373 in Oracle on September 12, 2024 and sell it today you would earn a total of 7,401 from holding Oracle or generate 71.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Oracle vs. ENEOS Holdings
Performance |
| Timeline |
| Oracle |
| ENEOS Holdings |
Oracle and ENEOS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and ENEOS Holdings
The main advantage of trading using opposite Oracle and ENEOS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, ENEOS Holdings 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 ENEOS Holdings will offset losses from the drop in ENEOS Holdings' 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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