Correlation Between Omega Healthcare and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Zegona Communications 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 Zegona Communications 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 Zegona Communications Plc, you can compare the effects of market volatilities on Omega Healthcare and Zegona Communications 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 Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Zegona Communications.
Diversification Opportunities for Omega Healthcare and Zegona Communications
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Omega and Zegona is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications Plc 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 Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Zegona Communications go up and down completely randomly.
Pair Corralation between Omega Healthcare and Zegona Communications
Assuming the 90 days trading horizon Omega Healthcare is expected to generate 7.47 times less return on investment than Zegona Communications. But when comparing it to its historical volatility, Omega Healthcare Investors is 8.5 times less risky than Zegona Communications. It trades about 0.06 of its potential returns per unit of risk. Zegona Communications Plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,650 in Zegona Communications Plc on October 30, 2024 and sell it today you would earn a total of 33,150 from holding Zegona Communications Plc or generate 433.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.94% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Zegona Communications Plc
Performance |
| Timeline |
| Omega Healthcare Inv |
| Zegona Communications Plc |
Omega Healthcare and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Zegona Communications
The main advantage of trading using opposite Omega Healthcare and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' long position.| Omega Healthcare vs. Qurate Retail Series | Omega Healthcare vs. Bellevue Healthcare Trust | Omega Healthcare vs. Rosslyn Data Technologies | Omega Healthcare vs. Datalogic |
| Zegona Communications vs. Creo Medical Group | Zegona Communications vs. Young Cos Brewery | Zegona Communications vs. DFS Furniture PLC | Zegona Communications vs. Cairn Homes PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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