Correlation Between Oracle and AIXTRON SE

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

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

Diversification Opportunities for Oracle and AIXTRON SE

0.94

Correlation Coefficient

Oracle  AIXTRON SE

Almost no diversification

The 3 months correlation between Oracle and AIXTRON is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and AIXTRON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIXTRON SE 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 AIXTRON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIXTRON SE has no effect on the direction of Oracle i.e., Oracle and AIXTRON SE go up and down completely randomly.

Pair Corralation between Oracle and AIXTRON SE

Given the investment horizon of 90 days Oracle is expected to generate 0.72 times more return on investment than AIXTRON SE. However, Oracle is 1.39 times less risky than AIXTRON SE. It trades about 0.36 of its potential returns per unit of risk. AIXTRON SE is currently generating about 0.2 per unit of risk. If you would invest  13,984  in Oracle on April 28, 2025 and sell it today you would earn a total of  10,528  from holding Oracle or generate 75.29% 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.  AIXTRON SE

Oracle

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Oracle disclosed solid returns over the last few months and may actually be approaching a breakup point.

AIXTRON SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AIXTRON SE are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, AIXTRON SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oracle and AIXTRON SE

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

The idea behind Oracle and AIXTRON SE 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.