Correlation Between Omega Healthcare and Dentsply Sirona
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Dentsply Sirona 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 Omega Healthcare and Dentsply Sirona into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omega Healthcare Investors and Dentsply Sirona, you can compare the effects of market volatilities on Omega Healthcare and Dentsply Sirona 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 Omega Healthcare with a short position of Dentsply Sirona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Dentsply Sirona.
Diversification Opportunities for Omega Healthcare and Dentsply Sirona
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omega and Dentsply is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and Omega Healthcare 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 Omega Healthcare Investors are associated (or correlated) with Dentsply Sirona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dentsply Sirona has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Dentsply Sirona go up and down completely randomly.
Pair Corralation between Omega Healthcare and Dentsply Sirona
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to under-perform the Dentsply Sirona. In addition to that, Omega Healthcare is 1.19 times more volatile than Dentsply Sirona. It trades about -0.03 of its total potential returns per unit of risk. Dentsply Sirona is currently generating about 0.19 per unit of volatility. If you would invest 1,873 in Dentsply Sirona on November 3, 2024 and sell it today you would earn a total of 122.00 from holding Dentsply Sirona or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Dentsply Sirona
Performance |
| Timeline |
| Omega Healthcare Inv |
| Dentsply Sirona |
Omega Healthcare and Dentsply Sirona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Dentsply Sirona
The main advantage of trading using opposite Omega Healthcare and Dentsply Sirona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Dentsply Sirona 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 Dentsply Sirona will offset losses from the drop in Dentsply Sirona's long position.| Omega Healthcare vs. Check Point Software | Omega Healthcare vs. Young Cos Brewery | Omega Healthcare vs. International Biotechnology Trust | Omega Healthcare vs. Host Hotels Resorts |
| Dentsply Sirona vs. Samsung Electronics Co | Dentsply Sirona vs. Samsung Electronics Co | Dentsply Sirona vs. Toyota Motor Corp | Dentsply Sirona vs. Reliance Industries Ltd |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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