Correlation Between Oracle and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both Oracle and Wintrust Financial 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 Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Wintrust Financial, you can compare the effects of market volatilities on Oracle and Wintrust Financial 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 Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Wintrust Financial.
Diversification Opportunities for Oracle and Wintrust Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oracle and Wintrust is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Wintrust Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial 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 Wintrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintrust Financial has no effect on the direction of Oracle i.e., Oracle and Wintrust Financial go up and down completely randomly.
Pair Corralation between Oracle and Wintrust Financial
Given the investment horizon of 90 days Oracle is expected to generate 2.38 times less return on investment than Wintrust Financial. But when comparing it to its historical volatility, Oracle is 1.21 times less risky than Wintrust Financial. It trades about 0.09 of its potential returns per unit of risk. Wintrust Financial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 10,472 in Wintrust Financial on September 13, 2024 and sell it today you would earn a total of 2,941 from holding Wintrust Financial or generate 28.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Oracle vs. Wintrust Financial
Performance |
Timeline |
Oracle |
Wintrust Financial |
Oracle and Wintrust Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oracle and Wintrust Financial
The main advantage of trading using opposite Oracle and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Wintrust Financial 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 Wintrust Financial will offset losses from the drop in Wintrust Financial's long position.Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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