Correlation Between Retail Estates and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Omega Healthcare 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 Retail Estates and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Omega Healthcare Investors, you can compare the effects of market volatilities on Retail Estates and Omega Healthcare 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 Retail Estates with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Omega Healthcare.
Diversification Opportunities for Retail Estates and Omega Healthcare
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Retail and Omega is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv and Retail Estates 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 Retail Estates NV are associated (or correlated) with Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Retail Estates i.e., Retail Estates and Omega Healthcare go up and down completely randomly.
Pair Corralation between Retail Estates and Omega Healthcare
Assuming the 90 days trading horizon Retail Estates NV is expected to under-perform the Omega Healthcare. In addition to that, Retail Estates is 5.17 times more volatile than Omega Healthcare Investors. It trades about -0.06 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.06 per unit of volatility. If you would invest 4,188 in Omega Healthcare Investors on August 31, 2024 and sell it today you would lose (108.00) from holding Omega Healthcare Investors or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. Omega Healthcare Investors
Performance |
| Timeline |
| Retail Estates NV |
| Omega Healthcare Inv |
Retail Estates and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Omega Healthcare
The main advantage of trading using opposite Retail Estates and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.| Retail Estates vs. Leroy Seafood Group | Retail Estates vs. MT Bank Corp | Retail Estates vs. Virgin Wines UK | Retail Estates vs. UNIQA Insurance Group |
| Omega Healthcare vs. Neometals | Omega Healthcare vs. Coor Service Management | Omega Healthcare vs. Aeorema Communications Plc | Omega Healthcare vs. JLEN Environmental Assets |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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