If "the performance is pretty important", you should avoid the "looping" on substrings.
Here an alternative using the XOR (as proposed by @EvilTeach).
with string_transform as (
select 'abc def hijk www' str1, 'abc def iosk www' str2 from dual
),
str as (
select
str1, str2,
-- add suffix to handle nulls and identical strings
-- calculate XOR
utl_raw.bit_xor(utl_raw.cast_to_raw(str1||'X'),utl_raw.cast_to_raw(str2||'Y')) str1_xor_str2
from string_transform
), str2 as (
select
str1, str2,
str1_xor_str2,
-- replace all non-identical characters (not 00) with 2D = '-'
utl_raw.translate(str1_xor_str2,
utl_raw.translate(str1_xor_str2,'00','01'),
utl_raw.copies('2D',length(str1_xor_str2))) xor1
from str
), str3 as (
select
str1, str2,
-- replace all identical characters (00) with 2B (= '+') and cast back to string
utl_raw.cast_to_varchar2(utl_raw.translate(xor1,'00','2B')) diff
-- diff = ++++++++---+++++ (+ means identical position; - difference)
from str2
)
select str1, str2,
-- remove the appended suffix character
substr(diff,1,length(diff)-1) diff,
-- calculate the length of the identical prefix
instr(diff,'-')-1 same_prf_length
from str3
;
Basically both strings are first converted to RAW format. XOR sets the identical bytes (characters) to 00. With translate the identical bytes are converted to '+', all other to '-'.
The identical prefix length is the position of the first '-' in the string minus one.
Technically a (different) sufix character is added to both strings to hanlde NULLs and identical strings.
Note that if the string is longer that 2000, some extra processing must be added
due to limitation of UTL_RAW.CAST_TO_VARCHAR2.