Correlation Between Ross Stores and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Omega Healthcare 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 Ross Stores and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Omega Healthcare Investors, you can compare the effects of market volatilities on Ross Stores and Omega Healthcare 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 Ross Stores with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Omega Healthcare.
Diversification Opportunities for Ross Stores and Omega Healthcare
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ross and Omega is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv and Ross Stores 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 Ross Stores are associated (or correlated) with Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Ross Stores i.e., Ross Stores and Omega Healthcare go up and down completely randomly.
Pair Corralation between Ross Stores and Omega Healthcare
Assuming the 90 days trading horizon Ross Stores is expected to generate 1.52 times less return on investment than Omega Healthcare. But when comparing it to its historical volatility, Ross Stores is 1.44 times less risky than Omega Healthcare. It trades about 0.05 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,469 in Omega Healthcare Investors on October 25, 2024 and sell it today you would earn a total of 1,231 from holding Omega Healthcare Investors or generate 49.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Ross Stores vs. Omega Healthcare Investors
Performance |
| Timeline |
| Ross Stores |
| Omega Healthcare Inv |
Ross Stores and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Omega Healthcare
The main advantage of trading using opposite Ross Stores and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.| Ross Stores vs. Cornish Metals | Ross Stores vs. Coeur Mining | Ross Stores vs. First Class Metals | Ross Stores vs. Rheinmetall AG |
| Omega Healthcare vs. Edinburgh Investment Trust | Omega Healthcare vs. Canadian General Investments | Omega Healthcare vs. Rheinmetall AG | Omega Healthcare vs. Air Products Chemicals |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |