Correlation Between Lumia and Oracle Financial

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

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

Diversification Opportunities for Lumia and Oracle Financial

-0.2

Correlation Coefficient

Lumia  Oracle Financial

Good diversification

The 3 months correlation between Lumia and Oracle is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lumia 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 Lumia 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 Lumia 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 Lumia i.e., Lumia and Oracle Financial go up and down completely randomly.

Pair Corralation between Lumia and Oracle Financial

Assuming the 90 days trading horizon Lumia is expected to under-perform the Oracle Financial. In addition to that, Lumia is 3.53 times more volatile than Oracle Financial Services. It trades about -0.18 of its total potential returns per unit of risk. Oracle Financial Services is currently generating about -0.35 per unit of volatility. If you would invest  1,225,700  in Oracle Financial Services on December 23, 2024 and sell it today you would lose (461,260) from holding Oracle Financial Services or give up 37.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Lumia  vs.  Oracle Financial Services

Lumia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lumia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Lumia shareholders.

Oracle Financial Services

Risk-Adjusted Performance

Very 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 unfluctuating 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.

Pair Trading with Lumia and Oracle Financial

The main advantage of trading using opposite Lumia and Oracle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia 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 Lumia 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.