Correlation Between Oracle and VMware
Can any of the company-specific risk be diversified away by investing in both Oracle and VMware 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 VMware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and VMware Inc, you can compare the effects of market volatilities on Oracle and VMware 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 VMware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and VMware.
Diversification Opportunities for Oracle and VMware
Very good diversification
The 3 months correlation between Oracle and VMware is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and VMware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VMware 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 VMware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VMware Inc has no effect on the direction of Oracle i.e., Oracle and VMware go up and down completely randomly.
Pair Corralation between Oracle and VMware
If you would invest 14,248 in VMware Inc on January 25, 2024 and sell it today you would earn a total of 0.00 from holding VMware Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Oracle vs. VMware Inc
Performance |
| Timeline |
| Oracle |
| VMware Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Oracle and VMware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and VMware
The main advantage of trading using opposite Oracle and VMware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, VMware 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 VMware will offset losses from the drop in VMware's long position.| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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