Correlation Between Oracle and Evolve NASDAQ

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

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

Diversification Opportunities for Oracle and Evolve NASDAQ

0.85

Correlation Coefficient

Oracle  Evolve NASDAQ

Very poor diversification

The 3 months correlation between Oracle and Evolve is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Evolve NASDAQ Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve NASDAQ Technology 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 Evolve NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve NASDAQ Technology has no effect on the direction of Oracle i.e., Oracle and Evolve NASDAQ go up and down completely randomly.

Pair Corralation between Oracle and Evolve NASDAQ

Given the investment horizon of 90 days Oracle is expected to under-perform the Evolve NASDAQ. In addition to that, Oracle is 2.06 times more volatile than Evolve NASDAQ Technology. It trades about -0.06 of its total potential returns per unit of risk. Evolve NASDAQ Technology is currently generating about -0.1 per unit of volatility. If you would invest  3,498  in Evolve NASDAQ Technology on December 27, 2024 and sell it today you would lose (363.00) from holding Evolve NASDAQ Technology or give up 10.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Oracle  vs.  Evolve NASDAQ Technology

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 latest abnormal performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Evolve NASDAQ Technology

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Oracle and Evolve NASDAQ

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

The idea behind Oracle and Evolve NASDAQ Technology 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.