Correlation Between Oracle and MClean Technologies

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

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

Diversification Opportunities for Oracle and MClean Technologies

0.03

Correlation Coefficient

Oracle  MClean Technologies

Significant diversification

The 3 months correlation between Oracle and MClean is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd and Oracle 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 are associated (or correlated) with MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of Oracle i.e., Oracle and MClean Technologies go up and down completely randomly.

Pair Corralation between Oracle and MClean Technologies

Given the investment horizon of 90 days Oracle is expected to under-perform the MClean Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Oracle is 1.03 times less risky than MClean Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The MClean Technologies Bhd is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  31.00  in MClean Technologies Bhd on December 30, 2024 and sell it today you would lose (3.00) from holding MClean Technologies Bhd or give up 9.68% of portfolio value over 90 days.

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

Oracle  vs.  MClean Technologies Bhd

Oracle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oracle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental 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.

MClean Technologies Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days MClean Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Oracle and MClean Technologies

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

The idea behind Oracle and MClean Technologies Bhd 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..