Correlation Between Oracle and Peak Resources
Can any of the company-specific risk be diversified away by investing in both Oracle and Peak Resources 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 Peak Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Peak Resources Limited, you can compare the effects of market volatilities on Oracle and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Peak Resources.
Diversification Opportunities for Oracle and Peak Resources
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oracle and Peak is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of Oracle i.e., Oracle and Peak Resources go up and down completely randomly.
Pair Corralation between Oracle and Peak Resources
Given the investment horizon of 90 days Oracle is expected to generate 0.26 times more return on investment than Peak Resources. However, Oracle is 3.81 times less risky than Peak Resources. It trades about 0.16 of its potential returns per unit of risk. Peak Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 11,774 in Oracle on September 3, 2024 and sell it today you would earn a total of 6,710 from holding Oracle or generate 56.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
Oracle vs. Peak Resources Limited
Performance |
| Timeline |
| Oracle |
| Peak Resources |
Oracle and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Peak Resources
The main advantage of trading using opposite Oracle and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Peak Resources vs. Peak Minerals Limited | Peak Resources vs. Anheuser Busch InBev SANV | Peak Resources vs. AALBERTS IND | Peak Resources vs. SECURITAS B |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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