Correlation Between Oracle and T.J. Maxx

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Can any of the company-specific risk be diversified away by investing in both Oracle and T.J. Maxx 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 T.J. Maxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle Corp and TJX Companies, you can compare the effects of market volatilities on Oracle and T.J. Maxx 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 T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and T.J. Maxx.

Diversification Opportunities for Oracle and T.J. Maxx

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Oracle and T.J. Maxx is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Oracle Corp and TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies 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 Corp are associated (or correlated) with T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of Oracle i.e., Oracle and T.J. Maxx go up and down completely randomly.

Pair Corralation between Oracle and T.J. Maxx

Given the investment horizon of 90 days Oracle is expected to generate 1.08 times less return on investment than T.J. Maxx. In addition to that, Oracle is 1.03 times more volatile than TJX Companies. It trades about 0.01 of its total potential returns per unit of risk. TJX Companies is currently generating about 0.01 per unit of volatility. If you would invest  6,211  in TJX Companies on June 26, 2022 and sell it today you would lose (84.00)  from holding TJX Companies or give up 1.35% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Oracle Corp  vs.  TJX Companies

 Performance (%) 
       Timeline  
Oracle Corp 
Oracle Performance
0 of 100
Over the last 90 days Oracle Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Oracle Price Channel

TJX Companies 
T.J. Maxx Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TJX Companies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward-looking indicators, T.J. Maxx is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

T.J. Maxx Price Channel

Oracle and T.J. Maxx Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oracle and T.J. Maxx

The main advantage of trading using opposite Oracle and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx's long position.
Oracle vs. Industrias Bachoco SA
The idea behind Oracle Corp and TJX Companies 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.
T.J. Maxx vs. Industrias Bachoco SA
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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