Correlation Between Oracle and Vanguard International

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

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

Diversification Opportunities for Oracle and Vanguard International

-0.28

Correlation Coefficient

Oracle  Vanguard International

Very good diversification

The 3 months correlation between Oracle and Vanguard is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Vanguard International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard International 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 Vanguard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard International has no effect on the direction of Oracle i.e., Oracle and Vanguard International go up and down completely randomly.

Pair Corralation between Oracle and Vanguard International

Given the investment horizon of 90 days Oracle is expected to under-perform the Vanguard International. In addition to that, Oracle is 3.7 times more volatile than Vanguard International Value. It trades about -0.07 of its total potential returns per unit of risk. Vanguard International Value is currently generating about 0.13 per unit of volatility. If you would invest  3,760  in Vanguard International Value on December 29, 2024 and sell it today you would earn a total of  266.00  from holding Vanguard International Value or generate 7.07% return on investment over 90 days.

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

Oracle  vs.  Vanguard International Value

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.

Vanguard International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard International Value are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Vanguard International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Oracle and Vanguard International

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

The idea behind Oracle and Vanguard International Value 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.