Correlation Between Oracle and Propert Buil

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

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

Diversification Opportunities for Oracle and Propert Buil

0.58

Correlation Coefficient

Oracle  Propert Buil

Very weak diversification

The 3 months correlation between Oracle and Propert is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Propert Buil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propert Buil 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 Propert Buil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Propert Buil has no effect on the direction of Oracle i.e., Oracle and Propert Buil go up and down completely randomly.

Pair Corralation between Oracle and Propert Buil

Given the investment horizon of 90 days Oracle is expected to under-perform the Propert Buil. But the stock apears to be less risky and, when comparing its historical volatility, Oracle is 1.01 times less risky than Propert Buil. The stock trades about -0.07 of its potential returns per unit of risk. The Propert Buil is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,463,000  in Propert Buil on December 29, 2024 and sell it today you would lose (293,000) from holding Propert Buil or give up 11.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.25%
Values	Daily Returns

Oracle  vs.  Propert Buil

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.

Propert Buil

Risk-Adjusted Performance

Very Weak

Over the last 90 days Propert Buil has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Oracle and Propert Buil

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

The idea behind Oracle and Propert Buil 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.