Correlation Between Oracle and Grupa KTY

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Can any of the company-specific risk be diversified away by investing in both Oracle and Grupa KTY 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 Grupa KTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Grupa KTY SA, you can compare the effects of market volatilities on Oracle and Grupa KTY 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 Grupa KTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Grupa KTY.

Diversification Opportunities for Oracle and Grupa KTY

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Oracle and Grupa is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Grupa KTY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa KTY SA 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 Grupa KTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa KTY SA has no effect on the direction of Oracle i.e., Oracle and Grupa KTY go up and down completely randomly.

Pair Corralation between Oracle and Grupa KTY

Given the investment horizon of 90 days Oracle is expected to generate 0.99 times more return on investment than Grupa KTY. However, Oracle is 1.01 times less risky than Grupa KTY. It trades about 0.25 of its potential returns per unit of risk. Grupa KTY SA is currently generating about 0.15 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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Oracle  vs.  Grupa KTY SA

 Performance 
       Timeline  
Oracle 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental indicators, Oracle disclosed solid returns over the last few months and may actually be approaching a breakup point.
Grupa KTY SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupa KTY SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Grupa KTY is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Oracle and Grupa KTY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oracle and Grupa KTY

The main advantage of trading using opposite Oracle and Grupa KTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Grupa KTY 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 Grupa KTY will offset losses from the drop in Grupa KTY's long position.
The idea behind Oracle and Grupa KTY SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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