Correlation Between Citigroup and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Omega Healthcare Investors, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Omega Healthcare.
Diversification Opportunities for Citigroup and Omega Healthcare
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Omega is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Omega Healthcare go up and down completely randomly.
Pair Corralation between Citigroup and Omega Healthcare
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.14 times less return on investment than Omega Healthcare. In addition to that, Citigroup is 1.1 times more volatile than Omega Healthcare Investors. It trades about 0.1 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.12 per unit of volatility. If you would invest 2,544 in Omega Healthcare Investors on August 25, 2024 and sell it today you would earn a total of 1,274 from holding Omega Healthcare Investors or generate 50.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Citigroup vs. Omega Healthcare Investors
Performance |
| Timeline |
| Citigroup |
| Omega Healthcare Inv |
Citigroup and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Omega Healthcare
The main advantage of trading using opposite Citigroup and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Omega Healthcare vs. Welltower | Omega Healthcare vs. Medical Properties Trust | Omega Healthcare vs. Sabra Health Care | Omega Healthcare vs. National Health Investors |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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