Correlation Between Omega Healthcare and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on Omega Healthcare and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Catalyst Media.
Diversification Opportunities for Omega Healthcare and Catalyst Media
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omega and Catalyst is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Catalyst Media go up and down completely randomly.
Pair Corralation between Omega Healthcare and Catalyst Media
Assuming the 90 days trading horizon Omega Healthcare is expected to generate 1.39 times less return on investment than Catalyst Media. But when comparing it to its historical volatility, Omega Healthcare Investors is 1.42 times less risky than Catalyst Media. It trades about 0.06 of its potential returns per unit of risk. Catalyst Media Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,500 in Catalyst Media Group on September 3, 2024 and sell it today you would earn a total of 500.00 from holding Catalyst Media Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Catalyst Media Group
Performance |
| Timeline |
| Omega Healthcare Inv |
| Catalyst Media Group |
Omega Healthcare and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Catalyst Media
The main advantage of trading using opposite Omega Healthcare and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Omega Healthcare vs. Catalyst Media Group | Omega Healthcare vs. CATLIN GROUP | Omega Healthcare vs. Tamburi Investment Partners | Omega Healthcare vs. Magnora ASA |
| Catalyst Media vs. Smithson Investment Trust | Catalyst Media vs. Kinnevik Investment AB | Catalyst Media vs. New Residential Investment | Catalyst Media vs. The Mercantile Investment |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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