Correlation Between Sugi Holdings and Oracle

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

By analyzing existing cross correlation between Sugi Holdings CoLtd and Oracle, you can compare the effects of market volatilities on Sugi Holdings and Oracle 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 Sugi Holdings with a short position of Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sugi Holdings and Oracle.

Diversification Opportunities for Sugi Holdings and Oracle

0.67

Correlation Coefficient

Sugi Holdings  Oracle

Poor diversification

The 3 months correlation between Sugi and Oracle is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sugi Holdings CoLtd and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle and Sugi Holdings 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 Sugi Holdings CoLtd are associated (or correlated) with Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of Sugi Holdings i.e., Sugi Holdings and Oracle go up and down completely randomly.

Pair Corralation between Sugi Holdings and Oracle

Assuming the 90 days horizon Sugi Holdings is expected to generate 3.69 times less return on investment than Oracle. But when comparing it to its historical volatility, Sugi Holdings CoLtd is 1.41 times less risky than Oracle. It trades about 0.12 of its potential returns per unit of risk. Oracle is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  13,333  in Oracle on May 1, 2025 and sell it today you would earn a total of  8,232  from holding Oracle or generate 61.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Sugi Holdings CoLtd  vs.  Oracle

Sugi Holdings CoLtd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sugi Holdings CoLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Sugi Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Oracle

Risk-Adjusted Performance

Solid

Over the last 90 days Oracle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Oracle reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sugi Holdings and Oracle

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

The idea behind Sugi Holdings CoLtd and Oracle 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.