Correlation Between Oracle Financial and Motilal Oswal

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

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

Diversification Opportunities for Oracle Financial and Motilal Oswal

0.76

Correlation Coefficient

Oracle Financial  Motilal Oswal

Poor diversification

The 3 months correlation between Oracle and Motilal is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Oracle Financial Services and Motilal Oswal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motilal Oswal Financial and Oracle Financial 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 Oracle Financial Services are associated (or correlated) with Motilal Oswal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motilal Oswal Financial has no effect on the direction of Oracle Financial i.e., Oracle Financial and Motilal Oswal go up and down completely randomly.

Pair Corralation between Oracle Financial and Motilal Oswal

Assuming the 90 days trading horizon Oracle Financial Services is expected to under-perform the Motilal Oswal. But the stock apears to be less risky and, when comparing its historical volatility, Oracle Financial Services is 1.56 times less risky than Motilal Oswal. The stock trades about -0.34 of its potential returns per unit of risk. The Motilal Oswal Financial is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  90,286  in Motilal Oswal Financial on December 27, 2024 and sell it today you would lose (29,076) from holding Motilal Oswal Financial or give up 32.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Oracle Financial Services  vs.  Motilal Oswal Financial

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 inconsistent 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.

Motilal Oswal Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Motilal Oswal Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Oracle Financial and Motilal Oswal

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

The idea behind Oracle Financial Services and Motilal Oswal Financial 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.