Correlation Between Flow Traders and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Flow Traders 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 Flow Traders and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and Omega Healthcare Investors, you can compare the effects of market volatilities on Flow Traders 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 Flow Traders with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Omega Healthcare.
Diversification Opportunities for Flow Traders and Omega Healthcare
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Flow and Omega is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV 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 Flow Traders 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 Flow Traders NV 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 Flow Traders i.e., Flow Traders and Omega Healthcare go up and down completely randomly.
Pair Corralation between Flow Traders and Omega Healthcare
Assuming the 90 days trading horizon Flow Traders NV is expected to generate 1.32 times more return on investment than Omega Healthcare. However, Flow Traders is 1.32 times more volatile than Omega Healthcare Investors. It trades about -0.12 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.22 per unit of risk. If you would invest 2,168 in Flow Traders NV on September 12, 2024 and sell it today you would lose (66.00) from holding Flow Traders NV or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders NV vs. Omega Healthcare Investors
Performance |
| Timeline |
| Flow Traders NV |
| Omega Healthcare Inv |
Flow Traders and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Omega Healthcare
The main advantage of trading using opposite Flow Traders and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders 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.| Flow Traders vs. Hong Kong Land | Flow Traders vs. Neometals | Flow Traders vs. Coor Service Management | Flow Traders vs. Fidelity Sustainable USD |
| Omega Healthcare vs. Hong Kong Land | Omega Healthcare vs. Neometals | Omega Healthcare vs. Coor Service Management | Omega Healthcare vs. Fidelity Sustainable USD |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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