Correlation Between Oracle and Brunel International

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

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

Diversification Opportunities for Oracle and Brunel International

-0.56

Correlation Coefficient

Oracle  Brunel International

Excellent diversification

The 3 months correlation between Oracle and Brunel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Brunel International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunel International 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 Brunel International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunel International has no effect on the direction of Oracle i.e., Oracle and Brunel International go up and down completely randomly.

Pair Corralation between Oracle and Brunel International

Given the investment horizon of 90 days Oracle is expected to under-perform the Brunel International. In addition to that, Oracle is 1.8 times more volatile than Brunel International NV. It trades about -0.07 of its total potential returns per unit of risk. Brunel International NV is currently generating about 0.15 per unit of volatility. If you would invest  890.00  in Brunel International NV on December 29, 2024 and sell it today you would earn a total of  156.00  from holding Brunel International NV or generate 17.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Oracle  vs.  Brunel International NV

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.

Brunel International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brunel International NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Brunel International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oracle and Brunel International

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

The idea behind Oracle and Brunel International NV 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.