Correlation Between GOODTECH ASA and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both GOODTECH ASA 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 GOODTECH ASA and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOODTECH ASA A and Omega Healthcare Investors, you can compare the effects of market volatilities on GOODTECH ASA 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 GOODTECH ASA with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODTECH ASA and Omega Healthcare.
Diversification Opportunities for GOODTECH ASA and Omega Healthcare
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GOODTECH and Omega is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GOODTECH ASA A 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 GOODTECH ASA 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 GOODTECH ASA A 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 GOODTECH ASA i.e., GOODTECH ASA and Omega Healthcare go up and down completely randomly.
Pair Corralation between GOODTECH ASA and Omega Healthcare
Assuming the 90 days horizon GOODTECH ASA A is expected to under-perform the Omega Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, GOODTECH ASA A is 1.23 times less risky than Omega Healthcare. The stock trades about -0.21 of its potential returns per unit of risk. The Omega Healthcare Investors is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,809 in Omega Healthcare Investors on August 29, 2024 and sell it today you would earn a total of 75.00 from holding Omega Healthcare Investors or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOODTECH ASA A vs. Omega Healthcare Investors
Performance |
| Timeline |
| GOODTECH ASA A |
| Omega Healthcare Inv |
GOODTECH ASA and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODTECH ASA and Omega Healthcare
The main advantage of trading using opposite GOODTECH ASA and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODTECH ASA 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.| GOODTECH ASA vs. Johnson Controls International | GOODTECH ASA vs. China Energy Engineering | GOODTECH ASA vs. AECOM | GOODTECH ASA vs. Superior Plus Corp |
| Omega Healthcare vs. Nufarm Limited | Omega Healthcare vs. Hanison Construction Holdings | Omega Healthcare vs. Hitachi Construction Machinery | Omega Healthcare vs. Chongqing Machinery Electric |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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