Correlation Between PTC India and Oracle Financial

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

By analyzing existing cross correlation between PTC India Financial and Oracle Financial Services, you can compare the effects of market volatilities on PTC India and Oracle 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 PTC India with a short position of Oracle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTC India and Oracle Financial.

Diversification Opportunities for PTC India and Oracle Financial

0.94

Correlation Coefficient

PTC India  Oracle Financial

Almost no diversification

The 3 months correlation between PTC and Oracle is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding PTC India Financial and Oracle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle Financial Services and PTC India 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 PTC India Financial are associated (or correlated) with Oracle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle Financial Services has no effect on the direction of PTC India i.e., PTC India and Oracle Financial go up and down completely randomly.

Pair Corralation between PTC India and Oracle Financial

Assuming the 90 days trading horizon PTC India Financial is expected to generate 1.46 times more return on investment than Oracle Financial. However, PTC India is 1.46 times more volatile than Oracle Financial Services. It trades about -0.11 of its potential returns per unit of risk. Oracle Financial Services is currently generating about -0.36 per unit of risk. If you would invest  3,978  in PTC India Financial on December 21, 2024 and sell it today you would lose (841.00) from holding PTC India Financial or give up 21.14% of portfolio value over 90 days.

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

PTC India Financial  vs.  Oracle Financial Services

PTC India Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTC India Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Oracle Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oracle Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PTC India and Oracle Financial

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

The idea behind PTC India Financial and Oracle Financial Services 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.