Correlation Between Oracle and Titanium Oyj

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

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

Diversification Opportunities for Oracle and Titanium Oyj

-0.13

Correlation Coefficient

Oracle  Titanium Oyj

Good diversification

The 3 months correlation between Oracle and Titanium is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Titanium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titanium Oyj 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 Titanium Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titanium Oyj has no effect on the direction of Oracle i.e., Oracle and Titanium Oyj go up and down completely randomly.

Pair Corralation between Oracle and Titanium Oyj

Given the investment horizon of 90 days Oracle is expected to generate 1.36 times more return on investment than Titanium Oyj. However, Oracle is 1.36 times more volatile than Titanium Oyj. It trades about -0.07 of its potential returns per unit of risk. Titanium Oyj is currently generating about -0.13 per unit of risk. If you would invest  16,648  in Oracle on December 30, 2024 and sell it today you would lose (2,561) from holding Oracle or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Oracle  vs.  Titanium Oyj

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.

Titanium Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Titanium Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Oracle and Titanium Oyj

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

The idea behind Oracle and Titanium Oyj 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.