Correlation Between Omega Healthcare and JPMorgan Japanese
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and JPMorgan Japanese 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 JPMorgan Japanese 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 JPMorgan Japanese Investment, you can compare the effects of market volatilities on Omega Healthcare and JPMorgan Japanese 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 JPMorgan Japanese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and JPMorgan Japanese.
Diversification Opportunities for Omega Healthcare and JPMorgan Japanese
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Omega and JPMorgan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and JPMorgan Japanese Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Japanese 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 JPMorgan Japanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Japanese has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and JPMorgan Japanese go up and down completely randomly.
Pair Corralation between Omega Healthcare and JPMorgan Japanese
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to generate 1.34 times more return on investment than JPMorgan Japanese. However, Omega Healthcare is 1.34 times more volatile than JPMorgan Japanese Investment. It trades about 0.07 of its potential returns per unit of risk. JPMorgan Japanese Investment is currently generating about 0.05 per unit of risk. If you would invest 2,401 in Omega Healthcare Investors on December 4, 2024 and sell it today you would earn a total of 1,321 from holding Omega Healthcare Investors or generate 55.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Omega Healthcare Investors vs. JPMorgan Japanese Investment
Performance |
| Timeline |
| Omega Healthcare Inv |
| JPMorgan Japanese |
Omega Healthcare and JPMorgan Japanese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and JPMorgan Japanese
The main advantage of trading using opposite Omega Healthcare and JPMorgan Japanese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, JPMorgan Japanese 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 JPMorgan Japanese will offset losses from the drop in JPMorgan Japanese's long position.| Omega Healthcare vs. Atalaya Mining | Omega Healthcare vs. Gaztransport et Technigaz | Omega Healthcare vs. Software Circle plc | Omega Healthcare vs. Ebro Foods |
| JPMorgan Japanese vs. Vitec Software Group | JPMorgan Japanese vs. Uber Technologies | JPMorgan Japanese vs. Ruffer Investment | JPMorgan Japanese vs. Livermore Investments Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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