Correlation Between Oracle and KLP Aksje

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

By analyzing existing cross correlation between Oracle and KLP Aksje Fremvoksende, you can compare the effects of market volatilities on Oracle and KLP Aksje 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 KLP Aksje. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and KLP Aksje.

Diversification Opportunities for Oracle and KLP Aksje

0.64

Correlation Coefficient

Oracle  KLP Aksje

Poor diversification

The 3 months correlation between Oracle and KLP is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and KLP Aksje Fremvoksende in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLP Aksje Fremvoksende 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 KLP Aksje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLP Aksje Fremvoksende has no effect on the direction of Oracle i.e., Oracle and KLP Aksje go up and down completely randomly.

Pair Corralation between Oracle and KLP Aksje

Given the investment horizon of 90 days Oracle is expected to under-perform the KLP Aksje. In addition to that, Oracle is 3.9 times more volatile than KLP Aksje Fremvoksende. It trades about -0.07 of its total potential returns per unit of risk. KLP Aksje Fremvoksende is currently generating about -0.05 per unit of volatility. If you would invest  297,709  in KLP Aksje Fremvoksende on December 30, 2024 and sell it today you would lose (7,933) from holding KLP Aksje Fremvoksende or give up 2.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Oracle  vs.  KLP Aksje Fremvoksende

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.

KLP Aksje Fremvoksende

Risk-Adjusted Performance

Very Weak

Over the last 90 days KLP Aksje Fremvoksende has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, KLP Aksje is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Oracle and KLP Aksje

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

The idea behind Oracle and KLP Aksje Fremvoksende 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.