Correlation Between Oracle and Intel

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

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

Diversification Opportunities for Oracle and Intel

0.75

Correlation Coefficient

Oracle  Intel

Poor diversification

The 3 months correlation between Oracle and Intel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Oracle i.e., Oracle and Intel go up and down completely randomly.

Pair Corralation between Oracle and Intel

Given the investment horizon of 90 days Oracle is expected to generate 0.92 times more return on investment than Intel. However, Oracle is 1.09 times less risky than Intel. It trades about 0.36 of its potential returns per unit of risk. Intel is currently generating about 0.02 per unit of risk. If you would invest  13,984  in Oracle on April 27, 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	Significant
Accuracy	100.0%
Values	Daily Returns

Oracle  vs.  Intel

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.

Intel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Intel 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 and Intel

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

The idea behind Oracle and Intel 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.