Correlation Between Oracle and Tiaa Cref

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

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

Diversification Opportunities for Oracle and Tiaa Cref

0.17

Correlation Coefficient

Oracle  Tiaa Cref

Average diversification

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

Pair Corralation between Oracle and Tiaa Cref

Given the investment horizon of 90 days Oracle is expected to generate 10.07 times more return on investment than Tiaa Cref. However, Oracle is 10.07 times more volatile than Tiaa Cref Emerging Markets. It trades about 0.23 of its potential returns per unit of risk. Tiaa Cref Emerging Markets is currently generating about 0.13 per unit of risk. If you would invest  13,958  in Oracle on September 9, 2024 and sell it today you would earn a total of  5,211  from holding Oracle or generate 37.33% return on investment over 90 days.

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

Oracle  vs.  Tiaa Cref Emerging Markets

Oracle

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental indicators, Oracle disclosed solid returns over the last few months and may actually be approaching a breakup point.

Tiaa Cref Emerging

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Emerging Markets are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oracle and Tiaa Cref

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

The idea behind Oracle and Tiaa Cref Emerging Markets 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.