Correlation Between Oracle and Sherwood Public

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

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

Diversification Opportunities for Oracle and Sherwood Public

0.17

Correlation Coefficient

Oracle  Sherwood Public

Average diversification

The 3 months correlation between Oracle and Sherwood is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Sherwood Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwood Public 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 Sherwood Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherwood Public has no effect on the direction of Oracle i.e., Oracle and Sherwood Public go up and down completely randomly.

Pair Corralation between Oracle and Sherwood Public

Given the investment horizon of 90 days Oracle is expected to under-perform the Sherwood Public. In addition to that, Oracle is 1.11 times more volatile than Sherwood Public. It trades about -0.07 of its total potential returns per unit of risk. Sherwood Public is currently generating about -0.01 per unit of volatility. If you would invest  286.00  in Sherwood Public on December 30, 2024 and sell it today you would lose (12.00) from holding Sherwood Public or give up 4.2% of portfolio value over 90 days.

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

Oracle  vs.  Sherwood Public

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.

Sherwood Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sherwood Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Sherwood Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Oracle and Sherwood Public

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

The idea behind Oracle and Sherwood Public 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.