Correlation Between Oracle and Putnam Multicap
Can any of the company-specific risk be diversified away by investing in both Oracle and Putnam Multicap 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 Putnam Multicap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Putnam Multicap Core, you can compare the effects of market volatilities on Oracle and Putnam Multicap 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 Putnam Multicap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Putnam Multicap.
Diversification Opportunities for Oracle and Putnam Multicap
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oracle and Putnam is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Putnam Multicap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multicap Core 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 Putnam Multicap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multicap Core has no effect on the direction of Oracle i.e., Oracle and Putnam Multicap go up and down completely randomly.
Pair Corralation between Oracle and Putnam Multicap
Given the investment horizon of 90 days Oracle is expected to generate 2.69 times more return on investment than Putnam Multicap. However, Oracle is 2.69 times more volatile than Putnam Multicap Core. It trades about 0.08 of its potential returns per unit of risk. Putnam Multicap Core is currently generating about 0.11 per unit of risk. If you would invest 8,274 in Oracle on December 2, 2024 and sell it today you would earn a total of 8,332 from holding Oracle or generate 100.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Oracle vs. Putnam Multicap Core
Performance |
Timeline |
Oracle |
Putnam Multicap Core |
Oracle and Putnam Multicap Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oracle and Putnam Multicap
The main advantage of trading using opposite Oracle and Putnam Multicap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Putnam Multicap 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 Putnam Multicap will offset losses from the drop in Putnam Multicap'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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