Correlation Between Omega Healthcare and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Omega Healthcare and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Samsung Electronics.
Diversification Opportunities for Omega Healthcare and Samsung Electronics
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omega and Samsung is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Samsung Electronics go up and down completely randomly.
Pair Corralation between Omega Healthcare and Samsung Electronics
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to generate 0.66 times more return on investment than Samsung Electronics. However, Omega Healthcare Investors is 1.52 times less risky than Samsung Electronics. It trades about 0.15 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.12 per unit of risk. If you would invest 3,101 in Omega Healthcare Investors on September 5, 2024 and sell it today you would earn a total of 856.00 from holding Omega Healthcare Investors or generate 27.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Samsung Electronics Co
Performance |
| Timeline |
| Omega Healthcare Inv |
| Samsung Electronics |
Omega Healthcare and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Samsung Electronics
The main advantage of trading using opposite Omega Healthcare and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Omega Healthcare vs. Samsung Electronics Co | Omega Healthcare vs. Samsung Electronics Co | Omega Healthcare vs. Hyundai Motor | Omega Healthcare vs. Toyota Motor Corp |
| Samsung Electronics vs. Berkshire Hathaway | Samsung Electronics vs. Chocoladefabriken Lindt Spruengli | Samsung Electronics vs. Rockwood Realisation PLC | Samsung Electronics 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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