Correlation Between Oracle and Champion Microelectronic

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

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

Diversification Opportunities for Oracle and Champion Microelectronic

-0.02

Correlation Coefficient

Oracle  Champion Microelectronic

Good diversification

The 3 months correlation between Oracle and Champion is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Champion Microelectronic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Microelectronic 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 Champion Microelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Microelectronic has no effect on the direction of Oracle i.e., Oracle and Champion Microelectronic go up and down completely randomly.

Pair Corralation between Oracle and Champion Microelectronic

Given the investment horizon of 90 days Oracle is expected to under-perform the Champion Microelectronic. In addition to that, Oracle is 1.3 times more volatile than Champion Microelectronic Corp. It trades about -0.07 of its total potential returns per unit of risk. Champion Microelectronic Corp is currently generating about 0.02 per unit of volatility. If you would invest  5,400  in Champion Microelectronic Corp on December 30, 2024 and sell it today you would earn a total of  80.00  from holding Champion Microelectronic Corp or generate 1.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.94%
Values	Daily Returns

Oracle  vs.  Champion Microelectronic Corp

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.

Champion Microelectronic

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Champion Microelectronic Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Champion Microelectronic is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Oracle and Champion Microelectronic

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

The idea behind Oracle and Champion Microelectronic Corp 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.