Correlation Between Oracle and Matthews India

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

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

Diversification Opportunities for Oracle and Matthews India

0.24

Correlation Coefficient

Oracle  Matthews India

Modest diversification

The 3 months correlation between Oracle and Matthews is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Matthews India Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews India 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 Matthews India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews India has no effect on the direction of Oracle i.e., Oracle and Matthews India go up and down completely randomly.

Pair Corralation between Oracle and Matthews India

Given the investment horizon of 90 days Oracle is expected to under-perform the Matthews India. In addition to that, Oracle is 3.04 times more volatile than Matthews India Fund. It trades about -0.07 of its total potential returns per unit of risk. Matthews India Fund is currently generating about -0.1 per unit of volatility. If you would invest  2,534  in Matthews India Fund on December 29, 2024 and sell it today you would lose (165.00) from holding Matthews India Fund or give up 6.51% of portfolio value over 90 days.

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

Oracle  vs.  Matthews India Fund

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.

Matthews India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matthews India Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Oracle and Matthews India

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

The idea behind Oracle and Matthews India Fund 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.