Correlation Between Omega Healthcare and Primary Health
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Primary Health 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 Primary Health 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 Primary Health Properties, you can compare the effects of market volatilities on Omega Healthcare and Primary Health 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 Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Primary Health.
Diversification Opportunities for Omega Healthcare and Primary Health
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Omega and Primary is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Primary Health go up and down completely randomly.
Pair Corralation between Omega Healthcare and Primary Health
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to under-perform the Primary Health. In addition to that, Omega Healthcare is 1.33 times more volatile than Primary Health Properties. It trades about -0.08 of its total potential returns per unit of risk. Primary Health Properties is currently generating about -0.1 per unit of volatility. If you would invest 9,064 in Primary Health Properties on October 25, 2024 and sell it today you would lose (209.00) from holding Primary Health Properties or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Primary Health Properties
Performance |
| Timeline |
| Omega Healthcare Inv |
| Primary Health Properties |
Omega Healthcare and Primary Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Primary Health
The main advantage of trading using opposite Omega Healthcare and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Primary Health 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 Primary Health will offset losses from the drop in Primary Health's long position.| Omega Healthcare vs. Edinburgh Investment Trust | Omega Healthcare vs. Canadian General Investments | Omega Healthcare vs. Rheinmetall AG | Omega Healthcare vs. Air Products Chemicals |
| Primary Health vs. Monks Investment Trust | Primary Health vs. Mobius Investment Trust | Primary Health vs. EJF Investments | Primary Health vs. Omega Healthcare Investors |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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