Correlation Between Oracle and Northern Lion
Can any of the company-specific risk be diversified away by investing in both Oracle and Northern Lion 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 Northern Lion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Northern Lion Gold, you can compare the effects of market volatilities on Oracle and Northern Lion 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 Northern Lion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Northern Lion.
Diversification Opportunities for Oracle and Northern Lion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oracle and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Northern Lion Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lion Gold 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 Northern Lion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lion Gold has no effect on the direction of Oracle i.e., Oracle and Northern Lion go up and down completely randomly.
Pair Corralation between Oracle and Northern Lion
Given the investment horizon of 90 days Oracle is expected to generate 1.15 times more return on investment than Northern Lion. However, Oracle is 1.15 times more volatile than Northern Lion Gold. It trades about 0.1 of its potential returns per unit of risk. Northern Lion Gold is currently generating about -0.04 per unit of risk. If you would invest 7,791 in Oracle on September 5, 2024 and sell it today you would earn a total of 10,498 from holding Oracle or generate 134.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oracle vs. Northern Lion Gold
Performance |
| Timeline |
| Oracle |
| Northern Lion Gold |
Oracle and Northern Lion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Northern Lion
The main advantage of trading using opposite Oracle and Northern Lion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Northern Lion 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 Northern Lion will offset losses from the drop in Northern Lion's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Northern Lion vs. Qubec Nickel Corp | Northern Lion vs. IGO Limited | Northern Lion vs. Avarone Metals | Northern Lion vs. Elcora Advanced Materials |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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