Correlation Between Oracle and Beijing Bashi

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

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

Diversification Opportunities for Oracle and Beijing Bashi

-0.29

Correlation Coefficient

Oracle  Beijing Bashi

Very good diversification

The 3 months correlation between Oracle and Beijing is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Beijing Bashi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bashi Media 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 Beijing Bashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bashi Media has no effect on the direction of Oracle i.e., Oracle and Beijing Bashi go up and down completely randomly.

Pair Corralation between Oracle and Beijing Bashi

Given the investment horizon of 90 days Oracle is expected to under-perform the Beijing Bashi. In addition to that, Oracle is 1.06 times more volatile than Beijing Bashi Media. It trades about -0.07 of its total potential returns per unit of risk. Beijing Bashi Media is currently generating about -0.01 per unit of volatility. If you would invest  469.00  in Beijing Bashi Media on December 30, 2024 and sell it today you would lose (18.00) from holding Beijing Bashi Media or give up 3.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Oracle  vs.  Beijing Bashi Media

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.

Beijing Bashi Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beijing Bashi Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beijing Bashi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oracle and Beijing Bashi

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

The idea behind Oracle and Beijing Bashi Media 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 Global Correlations module to find global opportunities by holding instruments from different markets.