Correlation Between Omega Healthcare and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Host Hotels 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 Host Hotels 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 Host Hotels Resorts, you can compare the effects of market volatilities on Omega Healthcare and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Host Hotels.
Diversification Opportunities for Omega Healthcare and Host Hotels
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Omega and Host is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Host Hotels go up and down completely randomly.
Pair Corralation between Omega Healthcare and Host Hotels
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to generate 1.31 times more return on investment than Host Hotels. However, Omega Healthcare is 1.31 times more volatile than Host Hotels Resorts. It trades about -0.03 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about -0.13 per unit of risk. If you would invest 3,809 in Omega Healthcare Investors on October 24, 2024 and sell it today you would lose (39.00) from holding Omega Healthcare Investors or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Host Hotels Resorts
Performance |
| Timeline |
| Omega Healthcare Inv |
| Host Hotels Resorts |
Omega Healthcare and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Host Hotels
The main advantage of trading using opposite Omega Healthcare and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Omega Healthcare vs. Dentsply Sirona | Omega Healthcare vs. Solstad Offshore ASA | Omega Healthcare vs. Symphony Environmental Technologies | Omega Healthcare vs. Foresight Environmental Infrastructure |
| Host Hotels vs. Silver Bullet Data | Host Hotels vs. Sparebank 1 SR | Host Hotels vs. Manulife Financial Corp | Host Hotels vs. Gaming Realms plc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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