Correlation Between Apollo Commercial and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Apollo Commercial 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 Apollo Commercial and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Commercial Real and Omega Healthcare Investors, you can compare the effects of market volatilities on Apollo Commercial 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 Apollo Commercial with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Commercial and Omega Healthcare.
Diversification Opportunities for Apollo Commercial and Omega Healthcare
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Omega is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Commercial Real 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 Apollo Commercial 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 Apollo Commercial Real 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 Apollo Commercial i.e., Apollo Commercial and Omega Healthcare go up and down completely randomly.
Pair Corralation between Apollo Commercial and Omega Healthcare
Considering the 90-day investment horizon Apollo Commercial Real is expected to under-perform the Omega Healthcare. In addition to that, Apollo Commercial is 1.32 times more volatile than Omega Healthcare Investors. It trades about -0.01 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.2 per unit of volatility. If you would invest 3,123 in Omega Healthcare Investors on August 30, 2024 and sell it today you would earn a total of 944.00 from holding Omega Healthcare Investors or generate 30.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Commercial Real vs. Omega Healthcare Investors
Performance |
| Timeline |
| Apollo Commercial Real |
| Omega Healthcare Inv |
Apollo Commercial and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Commercial and Omega Healthcare
The main advantage of trading using opposite Apollo Commercial and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Commercial 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.| Apollo Commercial vs. Ellington Residential Mortgage | Apollo Commercial vs. Ares Commercial Real | Apollo Commercial vs. Cherry Hill Mortgage | Apollo Commercial vs. AGNC Investment Corp |
| Omega Healthcare vs. LTC Properties | Omega Healthcare vs. Healthpeak Properties | Omega Healthcare vs. Global Medical REIT | Omega Healthcare vs. Sabra Healthcare REIT |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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