Correlation Between Omega Healthcare and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Flow Traders 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 Flow Traders 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 Flow Traders NV, you can compare the effects of market volatilities on Omega Healthcare and Flow Traders 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 Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Flow Traders.
Diversification Opportunities for Omega Healthcare and Flow Traders
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Omega and Flow is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV 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 Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Flow Traders go up and down completely randomly.
Pair Corralation between Omega Healthcare and Flow Traders
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to under-perform the Flow Traders. But the stock apears to be less risky and, when comparing its historical volatility, Omega Healthcare Investors is 1.04 times less risky than Flow Traders. The stock trades about -0.02 of its potential returns per unit of risk. The Flow Traders NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,057 in Flow Traders NV on September 4, 2024 and sell it today you would earn a total of 37.00 from holding Flow Traders NV or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Flow Traders NV
Performance |
| Timeline |
| Omega Healthcare Inv |
| Flow Traders NV |
Omega Healthcare and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Flow Traders
The main advantage of trading using opposite Omega Healthcare and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| Omega Healthcare vs. Flow Traders NV | Omega Healthcare vs. Molson Coors Beverage | Omega Healthcare vs. Ebro Foods | Omega Healthcare vs. Premier Foods PLC |
| Flow Traders vs. Samsung Electronics Co | Flow Traders vs. Samsung Electronics Co | Flow Traders vs. Hyundai Motor | Flow Traders vs. Toyota Motor Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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