Correlation Between Omega Healthcare and Seraphim Space
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Seraphim Space 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 Seraphim Space 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 Seraphim Space Investment, you can compare the effects of market volatilities on Omega Healthcare and Seraphim Space 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 Seraphim Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Seraphim Space.
Diversification Opportunities for Omega Healthcare and Seraphim Space
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Omega and Seraphim is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Seraphim Space Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seraphim Space Investment 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 Seraphim Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seraphim Space Investment has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Seraphim Space go up and down completely randomly.
Pair Corralation between Omega Healthcare and Seraphim Space
Assuming the 90 days trading horizon Omega Healthcare Investors is expected to generate 1.21 times more return on investment than Seraphim Space. However, Omega Healthcare is 1.21 times more volatile than Seraphim Space Investment. It trades about -0.03 of its potential returns per unit of risk. Seraphim Space Investment is currently generating about -0.19 per unit of risk. If you would invest 3,786 in Omega Healthcare Investors on November 7, 2024 and sell it today you would lose (57.00) from holding Omega Healthcare Investors or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Seraphim Space Investment
Performance |
| Timeline |
| Omega Healthcare Inv |
| Seraphim Space Investment |
Omega Healthcare and Seraphim Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Seraphim Space
The main advantage of trading using opposite Omega Healthcare and Seraphim Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Seraphim Space 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 Seraphim Space will offset losses from the drop in Seraphim Space's long position.| Omega Healthcare vs. Concurrent Technologies Plc | Omega Healthcare vs. Pressure Technologies Plc | Omega Healthcare vs. Liontrust Asset Management | Omega Healthcare vs. Applied Materials |
| Seraphim Space vs. Quadrise Plc | Seraphim Space vs. ImmuPharma PLC | Seraphim Space vs. Intuitive Investments Group | Seraphim Space vs. European Metals Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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