Correlation Between Fica Empreendimentos and Oracle

Can any of the company-specific risk be diversified away by investing in both Fica Empreendimentos and Oracle 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 Fica Empreendimentos and Oracle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fica Empreendimentos Imobiliarios and Oracle, you can compare the effects of market volatilities on Fica Empreendimentos and Oracle 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 Fica Empreendimentos with a short position of Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fica Empreendimentos and Oracle.

Diversification Opportunities for Fica Empreendimentos and Oracle

0.19

Correlation Coefficient

Fica Empreendimentos  Oracle

Average diversification

The 3 months correlation between Fica and Oracle is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fica Empreendimentos Imobiliar and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle and Fica Empreendimentos 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 Fica Empreendimentos Imobiliarios are associated (or correlated) with Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of Fica Empreendimentos i.e., Fica Empreendimentos and Oracle go up and down completely randomly.

Pair Corralation between Fica Empreendimentos and Oracle

Assuming the 90 days trading horizon Fica Empreendimentos Imobiliarios is expected to under-perform the Oracle. In addition to that, Fica Empreendimentos is 1.27 times more volatile than Oracle. It trades about -0.06 of its total potential returns per unit of risk. Oracle is currently generating about 0.01 per unit of volatility. If you would invest  16,667  in Oracle on October 23, 2024 and sell it today you would lose (9.00) from holding Oracle or give up 0.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fica Empreendimentos Imobiliar  vs.  Oracle

Fica Empreendimentos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fica Empreendimentos Imobiliarios has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Oracle

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Oracle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fica Empreendimentos and Oracle

The main advantage of trading using opposite Fica Empreendimentos and Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fica Empreendimentos position performs unexpectedly, Oracle 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 Oracle will offset losses from the drop in Oracle's long position.

The idea behind Fica Empreendimentos Imobiliarios and Oracle 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.