Correlation Between Oracle and Fidelity Global

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

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

Diversification Opportunities for Oracle and Fidelity Global

0.64

Correlation Coefficient

Oracle  Fidelity Global

Poor diversification

The 3 months correlation between Oracle and Fidelity is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Fidelity Global Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Modity 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 Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Modity has no effect on the direction of Oracle i.e., Oracle and Fidelity Global go up and down completely randomly.

Pair Corralation between Oracle and Fidelity Global

Given the investment horizon of 90 days Oracle is expected to under-perform the Fidelity Global. In addition to that, Oracle is 3.17 times more volatile than Fidelity Global Modity. It trades about -0.03 of its total potential returns per unit of risk. Fidelity Global Modity is currently generating about -0.07 per unit of volatility. If you would invest  1,899  in Fidelity Global Modity on December 2, 2024 and sell it today you would lose (82.00) from holding Fidelity Global Modity or give up 4.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Oracle  vs.  Fidelity Global Modity

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 quite persistent fundamental indicators, Oracle is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Fidelity Global Modity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Global Modity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Fidelity Global 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 Fidelity Global

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

The idea behind Oracle and Fidelity Global Modity 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.