Correlation Between Oracle Financial and Investment Trust

Can any of the company-specific risk be diversified away by investing in both Oracle Financial and Investment Trust 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 Financial and Investment Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oracle Financial Services and The Investment Trust, you can compare the effects of market volatilities on Oracle Financial and Investment Trust 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 Financial with a short position of Investment Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle Financial and Investment Trust.

Diversification Opportunities for Oracle Financial and Investment Trust

0.6

Correlation Coefficient

Oracle Financial  Investment Trust

Poor diversification

The 3 months correlation between Oracle and Investment is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Oracle Financial Services and The Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Trust and Oracle Financial 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 Financial Services are associated (or correlated) with Investment Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Trust has no effect on the direction of Oracle Financial i.e., Oracle Financial and Investment Trust go up and down completely randomly.

Pair Corralation between Oracle Financial and Investment Trust

Assuming the 90 days trading horizon Oracle Financial Services is expected to generate 0.78 times more return on investment than Investment Trust. However, Oracle Financial Services is 1.29 times less risky than Investment Trust. It trades about 0.11 of its potential returns per unit of risk. The Investment Trust is currently generating about 0.02 per unit of risk. If you would invest  756,467  in Oracle Financial Services on April 13, 2025 and sell it today you would earn a total of  107,133  from holding Oracle Financial Services or generate 14.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Oracle Financial Services  vs.  The Investment Trust

Oracle Financial Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle Financial Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Oracle Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Investment Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Investment Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Investment Trust is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oracle Financial and Investment Trust

The main advantage of trading using opposite Oracle Financial and Investment Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle Financial position performs unexpectedly, Investment Trust 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 Investment Trust will offset losses from the drop in Investment Trust's long position.

The idea behind Oracle Financial Services and The Investment Trust 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.