Correlation Between Oracle and Kvika Banki

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

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

Diversification Opportunities for Oracle and Kvika Banki

0.53

Correlation Coefficient

Oracle  Kvika Banki

Very weak diversification

The 3 months correlation between Oracle and Kvika is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Kvika banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kvika banki hf 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 Kvika Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kvika banki hf has no effect on the direction of Oracle i.e., Oracle and Kvika Banki go up and down completely randomly.

Pair Corralation between Oracle and Kvika Banki

Given the investment horizon of 90 days Oracle is expected to generate 0.98 times more return on investment than Kvika Banki. However, Oracle is 1.02 times less risky than Kvika Banki. It trades about -0.05 of its potential returns per unit of risk. Kvika banki hf is currently generating about -0.11 per unit of risk. If you would invest  16,648  in Oracle on December 29, 2024 and sell it today you would lose (2,070) from holding Oracle or give up 12.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Oracle  vs.  Kvika banki hf

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.

Kvika banki hf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kvika banki hf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Oracle and Kvika Banki

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

The idea behind Oracle and Kvika banki hf 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.