Correlation Between Omega Healthcare and Addtech
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Addtech 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 Addtech 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 Addtech, you can compare the effects of market volatilities on Omega Healthcare and Addtech 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 Addtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Addtech.
Diversification Opportunities for Omega Healthcare and Addtech
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omega and Addtech is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Addtech go up and down completely randomly.
Pair Corralation between Omega Healthcare and Addtech
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to generate 0.68 times more return on investment than Addtech. However, Omega Healthcare Investors is 1.47 times less risky than Addtech. It trades about 0.06 of its potential returns per unit of risk. Addtech is currently generating about -0.06 per unit of risk. If you would invest 3,899 in Omega Healthcare Investors on September 3, 2024 and sell it today you would earn a total of 173.00 from holding Omega Healthcare Investors or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Addtech
Performance |
| Timeline |
| Omega Healthcare Inv |
| Addtech |
Omega Healthcare and Addtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Addtech
The main advantage of trading using opposite Omega Healthcare and Addtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Addtech 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 Addtech will offset losses from the drop in Addtech's long position.| Omega Healthcare vs. Catalyst Media Group | Omega Healthcare vs. CATLIN GROUP | Omega Healthcare vs. Magnora ASA | Omega Healthcare vs. RTW Venture Fund |
| Addtech vs. Schroders Investment Trusts | Addtech vs. Greenroc Mining PLC | Addtech vs. FC Investment Trust | Addtech vs. Taylor Maritime Investments |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |