Correlation Between Oracle and Red Hat
Can any of the company-specific risk be diversified away by investing in both Oracle and Red Hat 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 Red Hat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Red Hat, you can compare the effects of market volatilities on Oracle and Red Hat 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 Red Hat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Red Hat.
Diversification Opportunities for Oracle and Red Hat
Pay attention - limited upside
The 3 months correlation between Oracle and Red is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Red Hat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Hat 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 Red Hat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Hat has no effect on the direction of Oracle i.e., Oracle and Red Hat go up and down completely randomly.
Pair Corralation between Oracle and Red Hat
If you would invest 7,022 in Oracle on January 26, 2024 and sell it today you would earn a total of 4,512 from holding Oracle or generate 64.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Oracle vs. Red Hat
Performance |
| Timeline |
| Oracle |
| Red Hat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Oracle and Red Hat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Red Hat
The main advantage of trading using opposite Oracle and Red Hat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Red Hat 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 Red Hat will offset losses from the drop in Red Hat's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Red Hat vs. Torm PLC Class | Red Hat vs. Western Copper and | Red Hat vs. Griffon | Red Hat vs. Apogee Enterprises |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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