Correlation Between Oracle and Box
Can any of the company-specific risk be diversified away by investing in both Oracle and Box 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 Box into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Box Inc, you can compare the effects of market volatilities on Oracle and Box 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 Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Box.
Diversification Opportunities for Oracle and Box
Poor diversification
The 3 months correlation between Oracle and Box is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc 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 Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Box Inc has no effect on the direction of Oracle i.e., Oracle and Box go up and down completely randomly.
Pair Corralation between Oracle and Box
Given the investment horizon of 90 days Oracle is expected to generate 1.17 times more return on investment than Box. However, Oracle is 1.17 times more volatile than Box Inc. It trades about 0.2 of its potential returns per unit of risk. Box Inc is currently generating about 0.23 per unit of risk. If you would invest 11,138 in Oracle on December 29, 2023 and sell it today you would earn a total of 1,423 from holding Oracle or generate 12.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Oracle vs. Box Inc
Performance |
Timeline |
Oracle |
Box Inc |
Oracle and Box Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oracle and Box
The main advantage of trading using opposite Oracle and Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Box 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 Box will offset losses from the drop in Box's long position.Oracle vs. Global Blue Group | Oracle vs. Aurora Mobile | Oracle vs. Marqeta | Oracle vs. Nextnav Acquisition Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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