Correlation Between Oracle and Oberbank

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

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

Diversification Opportunities for Oracle and Oberbank

-0.23

Correlation Coefficient

Oracle  Oberbank

Very good diversification

The 3 months correlation between Oracle and Oberbank is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank AG 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 Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of Oracle i.e., Oracle and Oberbank go up and down completely randomly.

Pair Corralation between Oracle and Oberbank

Given the investment horizon of 90 days Oracle is expected to under-perform the Oberbank. In addition to that, Oracle is 64.62 times more volatile than Oberbank AG. It trades about -0.07 of its total potential returns per unit of risk. Oberbank AG is currently generating about 0.18 per unit of volatility. If you would invest  6,980  in Oberbank AG on December 29, 2024 and sell it today you would earn a total of  40.00  from holding Oberbank AG or generate 0.57% return on investment over 90 days.

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

Oracle  vs.  Oberbank AG

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.

Oberbank AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oberbank AG are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Oberbank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Oracle and Oberbank

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

The idea behind Oracle and Oberbank AG 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.