Correlation Between Oracle and AdvisorShares

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

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

Diversification Opportunities for Oracle and AdvisorShares

0.0

Correlation Coefficient

Oracle  AdvisorShares

Pay attention - limited upside

The 3 months correlation between Oracle and AdvisorShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and AdvisorShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares 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 AdvisorShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares has no effect on the direction of Oracle i.e., Oracle and AdvisorShares go up and down completely randomly.

Pair Corralation between Oracle and AdvisorShares

If you would invest (100.00) in AdvisorShares on December 28, 2024 and sell it today you would earn a total of  100.00  from holding AdvisorShares or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Oracle  vs.  AdvisorShares

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.

AdvisorShares

Risk-Adjusted Performance

Very Weak

Over the last 90 days AdvisorShares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, AdvisorShares is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oracle and AdvisorShares

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

The idea behind Oracle and AdvisorShares 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.