Correlation Between Malu Paper and Oracle Financial

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

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

Diversification Opportunities for Malu Paper and Oracle Financial

0.56

Correlation Coefficient

Malu Paper  Oracle Financial

Very weak diversification

The 3 months correlation between Malu and Oracle is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Malu Paper Mills 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 Malu Paper 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 Malu Paper Mills 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 Malu Paper i.e., Malu Paper and Oracle Financial go up and down completely randomly.

Pair Corralation between Malu Paper and Oracle Financial

Assuming the 90 days trading horizon Malu Paper Mills is expected to generate 1.48 times more return on investment than Oracle Financial. However, Malu Paper is 1.48 times more volatile than Oracle Financial Services. It trades about -0.1 of its potential returns per unit of risk. Oracle Financial Services is currently generating about -0.55 per unit of risk. If you would invest  4,627  in Malu Paper Mills on October 22, 2024 and sell it today you would lose (265.00) from holding Malu Paper Mills or give up 5.73% of portfolio value over 90 days.

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

Malu Paper Mills  vs.  Oracle Financial Services

Malu Paper Mills

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Malu Paper Mills are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Malu Paper is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Oracle Financial Services

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Malu Paper and Oracle Financial

The main advantage of trading using opposite Malu Paper and Oracle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malu Paper 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 Malu Paper Mills 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.