Correlation Between Vulcan Materials and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials 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 Vulcan Materials and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials Co and Omega Healthcare Investors, you can compare the effects of market volatilities on Vulcan Materials 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 Vulcan Materials with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Omega Healthcare.
Diversification Opportunities for Vulcan Materials and Omega Healthcare
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vulcan and Omega is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co 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 Vulcan Materials 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 Vulcan Materials Co 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 Vulcan Materials i.e., Vulcan Materials and Omega Healthcare go up and down completely randomly.
Pair Corralation between Vulcan Materials and Omega Healthcare
Assuming the 90 days trading horizon Vulcan Materials Co is expected to generate 1.09 times more return on investment than Omega Healthcare. However, Vulcan Materials is 1.09 times more volatile than Omega Healthcare Investors. It trades about 0.08 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.06 per unit of risk. If you would invest 27,827 in Vulcan Materials Co on August 31, 2024 and sell it today you would earn a total of 833.00 from holding Vulcan Materials Co or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials Co vs. Omega Healthcare Investors
Performance |
| Timeline |
| Vulcan Materials |
| Omega Healthcare Inv |
Vulcan Materials and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Omega Healthcare
The main advantage of trading using opposite Vulcan Materials and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials 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.| Vulcan Materials vs. Neometals | Vulcan Materials vs. Coor Service Management | Vulcan Materials vs. Aeorema Communications Plc | Vulcan Materials vs. JLEN Environmental Assets |
| Omega Healthcare vs. Neometals | Omega Healthcare vs. Coor Service Management | Omega Healthcare vs. Aeorema Communications Plc | Omega Healthcare vs. JLEN Environmental Assets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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