Correlation Between Hilton Metal and Oracle Financial

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

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

Diversification Opportunities for Hilton Metal and Oracle Financial

0.63

Correlation Coefficient

Hilton Metal  Oracle Financial

Poor diversification

The 3 months correlation between Hilton and Oracle is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Metal Forging and Oracle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle Financial Services and Hilton Metal 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 Hilton Metal Forging are associated (or correlated) with Oracle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle Financial Services has no effect on the direction of Hilton Metal i.e., Hilton Metal and Oracle Financial go up and down completely randomly.

Pair Corralation between Hilton Metal and Oracle Financial

Assuming the 90 days trading horizon Hilton Metal Forging is expected to generate 2.19 times more return on investment than Oracle Financial. However, Hilton Metal is 2.19 times more volatile than Oracle Financial Services. It trades about 0.15 of its potential returns per unit of risk. Oracle Financial Services is currently generating about -0.1 per unit of risk. If you would invest  9,486  in Hilton Metal Forging on October 12, 2024 and sell it today you would earn a total of  1,062  from holding Hilton Metal Forging or generate 11.2% return on investment over 90 days.

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

Hilton Metal Forging  vs.  Oracle Financial Services

Hilton Metal Forging

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Metal Forging are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Hilton Metal sustained solid returns over the last few months and may actually be approaching a breakup point.

Oracle Financial Services

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Oracle Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Oracle Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hilton Metal and Oracle Financial

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

The idea behind Hilton Metal Forging and Oracle Financial Services 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.