Correlation Between Check Point and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Check Point 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 Check Point and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Omega Healthcare Investors, you can compare the effects of market volatilities on Check Point 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 Check Point with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Omega Healthcare.
Diversification Opportunities for Check Point and Omega Healthcare
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Omega is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software 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 Check Point 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 Check Point Software 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 Check Point i.e., Check Point and Omega Healthcare go up and down completely randomly.
Pair Corralation between Check Point and Omega Healthcare
Assuming the 90 days trading horizon Check Point Software is expected to generate 1.05 times more return on investment than Omega Healthcare. However, Check Point is 1.05 times more volatile than Omega Healthcare Investors. It trades about 0.23 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.03 per unit of risk. If you would invest 17,303 in Check Point Software on November 6, 2024 and sell it today you would earn a total of 4,018 from holding Check Point Software or generate 23.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.16% |
| Values | Daily Returns |
Check Point Software vs. Omega Healthcare Investors
Performance |
| Timeline |
| Check Point Software |
| Omega Healthcare Inv |
Check Point and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Omega Healthcare
The main advantage of trading using opposite Check Point and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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.| Check Point vs. Centaur Media | Check Point vs. LBG Media PLC | Check Point vs. Air Products Chemicals | Check Point vs. Intermediate Capital Group |
| Omega Healthcare vs. STMicroelectronics NV | Omega Healthcare vs. Rheinmetall AG | Omega Healthcare vs. Coeur Mining | Omega Healthcare vs. MTI Wireless Edge |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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