Correlation Between Rheinmetall and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Rheinmetall 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 Rheinmetall and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and Omega Healthcare Investors, you can compare the effects of market volatilities on Rheinmetall 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 Rheinmetall with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and Omega Healthcare.
Diversification Opportunities for Rheinmetall and Omega Healthcare
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rheinmetall and Omega is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG 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 Rheinmetall 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 Rheinmetall AG 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 Rheinmetall i.e., Rheinmetall and Omega Healthcare go up and down completely randomly.
Pair Corralation between Rheinmetall and Omega Healthcare
Assuming the 90 days trading horizon Rheinmetall AG is expected to generate 1.0 times more return on investment than Omega Healthcare. However, Rheinmetall AG is 1.0 times less risky than Omega Healthcare. It trades about 0.49 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.05 per unit of risk. If you would invest 61,360 in Rheinmetall AG on November 4, 2024 and sell it today you would earn a total of 14,150 from holding Rheinmetall AG or generate 23.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. Omega Healthcare Investors
Performance |
| Timeline |
| Rheinmetall AG |
| Omega Healthcare Inv |
Rheinmetall and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and Omega Healthcare
The main advantage of trading using opposite Rheinmetall and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall 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.| Rheinmetall vs. McEwen Mining | Rheinmetall vs. Pentair PLC | Rheinmetall vs. European Metals Holdings | Rheinmetall vs. GoldMining |
| Omega Healthcare vs. Made Tech Group | Omega Healthcare vs. Vitec Software Group | Omega Healthcare vs. Sartorius Stedim Biotech | Omega Healthcare vs. Raytheon Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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