Correlation Between CDK Global and Oracle
Can any of the company-specific risk be diversified away by investing in both CDK Global and Oracle 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 CDK Global and Oracle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDK Global Holdings and Oracle, you can compare the effects of market volatilities on CDK Global and Oracle 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 CDK Global with a short position of Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDK Global and Oracle.
Diversification Opportunities for CDK Global and Oracle
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CDK and Oracle is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CDK Global Holdings and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle and CDK Global 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 CDK Global Holdings are associated (or correlated) with Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of CDK Global i.e., CDK Global and Oracle go up and down completely randomly.
Pair Corralation between CDK Global and Oracle
If you would invest 11,427 in Oracle on January 26, 2024 and sell it today you would earn a total of 107.00 from holding Oracle or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.61% |
| Values | Daily Returns |
CDK Global Holdings vs. Oracle
Performance |
| Timeline |
| CDK Global Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Oracle |
CDK Global and Oracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDK Global and Oracle
The main advantage of trading using opposite CDK Global and Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDK Global position performs unexpectedly, Oracle 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 will offset losses from the drop in Oracle's long position.| CDK Global vs. Worthington Steel | CDK Global vs. Insteel Industries | CDK Global vs. CECO Environmental Corp | CDK Global vs. Bank of New |
| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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