Correlation Between Oracle and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Oracle and MACOM Technology 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 MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and MACOM Technology Solutions, you can compare the effects of market volatilities on Oracle and MACOM Technology 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 MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and MACOM Technology.
Diversification Opportunities for Oracle and MACOM Technology
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oracle and MACOM is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Oracle i.e., Oracle and MACOM Technology go up and down completely randomly.
Pair Corralation between Oracle and MACOM Technology
Given the investment horizon of 90 days Oracle is expected to generate 0.91 times more return on investment than MACOM Technology. However, Oracle is 1.1 times less risky than MACOM Technology. It trades about 0.09 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.03 per unit of risk. If you would invest 16,501 in Oracle on April 2, 2025 and sell it today you would earn a total of 5,428 from holding Oracle or generate 32.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oracle vs. MACOM Technology Solutions
Performance |
| Timeline |
| Oracle |
| MACOM Technology Sol |
Oracle and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and MACOM Technology
The main advantage of trading using opposite Oracle and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.| Oracle vs. Stepan Company | Oracle vs. Flexible Solutions International | Oracle vs. Griffon | Oracle vs. United Parks Resorts |
| MACOM Technology vs. Prudential Financial 4125 | MACOM Technology vs. Conifer Holdings, 975 | MACOM Technology vs. Kinsale Capital Group | MACOM Technology vs. JetAI 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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