Correlation Between Oracle and Cemtrex

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

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

Diversification Opportunities for Oracle and Cemtrex

-0.26

Correlation Coefficient

Oracle  Cemtrex

Very good diversification

The 3 months correlation between Oracle and Cemtrex is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Cemtrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemtrex 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 Cemtrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemtrex has no effect on the direction of Oracle i.e., Oracle and Cemtrex go up and down completely randomly.

Pair Corralation between Oracle and Cemtrex

Given the investment horizon of 90 days Oracle is expected to generate 0.3 times more return on investment than Cemtrex. However, Oracle is 3.32 times less risky than Cemtrex. It trades about 0.32 of its potential returns per unit of risk. Cemtrex is currently generating about -0.01 per unit of risk. If you would invest  14,739  in Oracle on May 6, 2025 and sell it today you would earn a total of  9,703  from holding Oracle or generate 65.83% return on investment over 90 days.

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

Oracle  vs.  Cemtrex

Oracle

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 25 (%) 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.

Cemtrex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cemtrex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Cemtrex is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oracle and Cemtrex

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

The idea behind Oracle and Cemtrex 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 Stocks Directory module to find actively traded stocks across global markets.