Correlation Between MIND CTI and Oracle

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Can any of the company-specific risk be diversified away by investing in both MIND CTI 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 MIND CTI and Oracle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIND CTI and Oracle, you can compare the effects of market volatilities on MIND CTI 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 MIND CTI with a short position of Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIND CTI and Oracle.

Diversification Opportunities for MIND CTI and Oracle

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between MIND and Oracle is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding MIND CTI and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle and MIND CTI 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 MIND CTI 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 MIND CTI i.e., MIND CTI and Oracle go up and down completely randomly.

Pair Corralation between MIND CTI and Oracle

Given the investment horizon of 90 days MIND CTI is expected to generate 2.86 times less return on investment than Oracle. But when comparing it to its historical volatility, MIND CTI is 2.33 times less risky than Oracle. It trades about 0.17 of its potential returns per unit of risk. Oracle is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  11,138  in Oracle on December 29, 2023 and sell it today you would earn a total of  1,389  from holding Oracle or generate 12.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

MIND CTI  vs.  Oracle

 Performance 
       Timeline  
MIND CTI 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MIND CTI are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, MIND CTI may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Oracle 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Oracle disclosed solid returns over the last few months and may actually be approaching a breakup point.

MIND CTI and Oracle Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MIND CTI and Oracle

The main advantage of trading using opposite MIND CTI and Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIND CTI 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.
The idea behind MIND CTI and Oracle pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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