Correlation Between Lundin Mining and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Lundin Mining 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 Lundin Mining and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining Corp and Omega Healthcare Investors, you can compare the effects of market volatilities on Lundin Mining 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 Lundin Mining with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Omega Healthcare.
Diversification Opportunities for Lundin Mining and Omega Healthcare
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and Omega is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp 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 Lundin Mining 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 Lundin Mining Corp 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 Lundin Mining i.e., Lundin Mining and Omega Healthcare go up and down completely randomly.
Pair Corralation between Lundin Mining and Omega Healthcare
Assuming the 90 days trading horizon Lundin Mining is expected to generate 1.37 times less return on investment than Omega Healthcare. In addition to that, Lundin Mining is 1.33 times more volatile than Omega Healthcare Investors. It trades about 0.03 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.06 per unit of volatility. If you would invest 2,415 in Omega Healthcare Investors on October 30, 2024 and sell it today you would earn a total of 1,413 from holding Omega Healthcare Investors or generate 58.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lundin Mining Corp vs. Omega Healthcare Investors
Performance |
| Timeline |
| Lundin Mining Corp |
| Omega Healthcare Inv |
Lundin Mining and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Omega Healthcare
The main advantage of trading using opposite Lundin Mining and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining 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.| Lundin Mining vs. Intermediate Capital Group | Lundin Mining vs. Baker Steel Resources | Lundin Mining vs. Everyman Media Group | Lundin Mining vs. Iron Mountain |
| Omega Healthcare vs. Qurate Retail Series | Omega Healthcare vs. Bellevue Healthcare Trust | Omega Healthcare vs. Rosslyn Data Technologies | Omega Healthcare vs. Datalogic |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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