Correlation Between Macquarie Group and Oracle
Can any of the company-specific risk be diversified away by investing in both Macquarie Group 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 Macquarie Group and Oracle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group Ltd and Oracle, you can compare the effects of market volatilities on Macquarie Group 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 Macquarie Group with a short position of Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Oracle.
Diversification Opportunities for Macquarie Group and Oracle
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and Oracle is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle and Macquarie Group 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 Macquarie Group Ltd 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 Macquarie Group i.e., Macquarie Group and Oracle go up and down completely randomly.
Pair Corralation between Macquarie Group and Oracle
Assuming the 90 days horizon Macquarie Group Ltd is expected to generate 1.12 times more return on investment than Oracle. However, Macquarie Group is 1.12 times more volatile than Oracle. It trades about -0.18 of its potential returns per unit of risk. Oracle is currently generating about -0.39 per unit of risk. If you would invest 12,875 in Macquarie Group Ltd on January 25, 2024 and sell it today you would lose (577.00) from holding Macquarie Group Ltd or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Ltd vs. Oracle
Performance |
| Timeline |
| Macquarie Group |
| Oracle |
Macquarie Group and Oracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Oracle
The main advantage of trading using opposite Macquarie Group and Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group 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.| Macquarie Group vs. First Tractor | Macquarie Group vs. Ag Growth International | Macquarie Group vs. AmeraMex International | Macquarie Group vs. Arts Way Manufacturing Co |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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