Correlation Between Oracle and Lkcm Equity
Can any of the company-specific risk be diversified away by investing in both Oracle and Lkcm Equity 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 Lkcm Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Lkcm Equity Fund, you can compare the effects of market volatilities on Oracle and Lkcm Equity 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 Lkcm Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Lkcm Equity.
Diversification Opportunities for Oracle and Lkcm Equity
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oracle and Lkcm is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Lkcm Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Equity Fund 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 Lkcm Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Equity Fund has no effect on the direction of Oracle i.e., Oracle and Lkcm Equity go up and down completely randomly.
Pair Corralation between Oracle and Lkcm Equity
Given the investment horizon of 90 days Oracle is expected to generate 2.63 times more return on investment than Lkcm Equity. However, Oracle is 2.63 times more volatile than Lkcm Equity Fund. It trades about -0.03 of its potential returns per unit of risk. Lkcm Equity Fund is currently generating about -0.15 per unit of risk. If you would invest 18,094 in Oracle on December 1, 2024 and sell it today you would lose (1,488) from holding Oracle or give up 8.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Oracle vs. Lkcm Equity Fund
Performance |
Timeline |
Oracle |
Lkcm Equity Fund |
Oracle and Lkcm Equity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oracle and Lkcm Equity
The main advantage of trading using opposite Oracle and Lkcm Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Lkcm Equity 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 Lkcm Equity will offset losses from the drop in Lkcm Equity's long position.Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Adobe Systems Incorporated |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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