Correlation Between Oracle and Nutanix

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

By analyzing existing cross correlation between Oracle and Nutanix, you can compare the effects of market volatilities on Oracle and Nutanix 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 Nutanix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Nutanix.

Diversification Opportunities for Oracle and Nutanix

0.08

Correlation Coefficient

Oracle  Nutanix

Significant diversification

The 3 months correlation between Oracle and Nutanix is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Nutanix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutanix 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 Nutanix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutanix has no effect on the direction of Oracle i.e., Oracle and Nutanix go up and down completely randomly.

Pair Corralation between Oracle and Nutanix

Assuming the 90 days horizon Oracle is expected to generate 1.31 times more return on investment than Nutanix. However, Oracle is 1.31 times more volatile than Nutanix. It trades about 0.37 of its potential returns per unit of risk. Nutanix is currently generating about 0.16 per unit of risk. If you would invest  11,098  in Oracle on April 21, 2025 and sell it today you would earn a total of  10,097  from holding Oracle or generate 90.98% return on investment over 90 days.

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

Oracle  vs.  Nutanix

Oracle

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Oracle reported solid returns over the last few months and may actually be approaching a breakup point.

Nutanix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nutanix reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oracle and Nutanix

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

The idea behind Oracle and Nutanix 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.