Correlation Between Fair Isaac and Oracle

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

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

Diversification Opportunities for Fair Isaac and Oracle

0.33

Correlation Coefficient

Fair Isaac  Oracle

Weak diversification

The 3 months correlation between Fair and Oracle is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac Corp and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle and Fair Isaac 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 Fair Isaac Corp 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 Fair Isaac i.e., Fair Isaac and Oracle go up and down completely randomly.

Pair Corralation between Fair Isaac and Oracle

Assuming the 90 days trading horizon Fair Isaac Corp is expected to under-perform the Oracle. But the stock apears to be less risky and, when comparing its historical volatility, Fair Isaac Corp is 1.32 times less risky than Oracle. The stock trades about -0.13 of its potential returns per unit of risk. The Oracle is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  16,319  in Oracle on December 20, 2024 and sell it today you would lose (2,513) from holding Oracle or give up 15.4% of portfolio value over 90 days.

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

Fair Isaac Corp  vs.  Oracle

Fair Isaac Corp

Risk-Adjusted Performance

Very Weak

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

Oracle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oracle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Fair Isaac and Oracle

The main advantage of trading using opposite Fair Isaac and Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Isaac 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 Fair Isaac Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.