Correlation Between Oracle Financial and Zensar Technologies

Can any of the company-specific risk be diversified away by investing in both Oracle Financial and Zensar Technologies 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 Zensar Technologies 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 Zensar Technologies Limited, you can compare the effects of market volatilities on Oracle Financial and Zensar Technologies 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 Zensar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle Financial and Zensar Technologies.

Diversification Opportunities for Oracle Financial and Zensar Technologies

0.51

Correlation Coefficient

Oracle Financial  Zensar Technologies

Very weak diversification

The 3 months correlation between Oracle and Zensar is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Oracle Financial Services and Zensar Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zensar Technologies 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 Zensar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zensar Technologies has no effect on the direction of Oracle Financial i.e., Oracle Financial and Zensar Technologies go up and down completely randomly.

Pair Corralation between Oracle Financial and Zensar Technologies

Assuming the 90 days trading horizon Oracle Financial Services is expected to under-perform the Zensar Technologies. In addition to that, Oracle Financial is 1.13 times more volatile than Zensar Technologies Limited. It trades about -0.05 of its total potential returns per unit of risk. Zensar Technologies Limited is currently generating about 0.08 per unit of volatility. If you would invest  68,590  in Zensar Technologies Limited on October 25, 2024 and sell it today you would earn a total of  6,415  from holding Zensar Technologies Limited or generate 9.35% return on investment over 90 days.

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

Oracle Financial Services  vs.  Zensar Technologies Limited

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 unfluctuating 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.

Zensar Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zensar Technologies Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Zensar Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Oracle Financial and Zensar Technologies

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

The idea behind Oracle Financial Services and Zensar Technologies Limited 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.