Correlation Between Oracle and Flexium Interconnect

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

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

Diversification Opportunities for Oracle and Flexium Interconnect

0.32

Correlation Coefficient

Oracle  Flexium Interconnect

Weak diversification

The 3 months correlation between Oracle and Flexium is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Flexium Interconnect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexium Interconnect 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 Flexium Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexium Interconnect has no effect on the direction of Oracle i.e., Oracle and Flexium Interconnect go up and down completely randomly.

Pair Corralation between Oracle and Flexium Interconnect

Given the investment horizon of 90 days Oracle is expected to under-perform the Flexium Interconnect. In addition to that, Oracle is 1.44 times more volatile than Flexium Interconnect. It trades about -0.05 of its total potential returns per unit of risk. Flexium Interconnect is currently generating about -0.01 per unit of volatility. If you would invest  6,520  in Flexium Interconnect on December 27, 2024 and sell it today you would lose (160.00) from holding Flexium Interconnect or give up 2.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.67%
Values	Daily Returns

Oracle  vs.  Flexium Interconnect

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 latest abnormal performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Flexium Interconnect

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flexium Interconnect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Flexium Interconnect 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 Flexium Interconnect

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

The idea behind Oracle and Flexium Interconnect 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.