Correlation Between Cousins Properties and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Cousins Properties 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 Cousins Properties and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cousins Properties Incorporated and Omega Healthcare Investors, you can compare the effects of market volatilities on Cousins Properties 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 Cousins Properties with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cousins Properties and Omega Healthcare.
Diversification Opportunities for Cousins Properties and Omega Healthcare
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cousins and Omega is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cousins Properties Incorporate 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 Cousins Properties 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 Cousins Properties Incorporated 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 Cousins Properties i.e., Cousins Properties and Omega Healthcare go up and down completely randomly.
Pair Corralation between Cousins Properties and Omega Healthcare
Considering the 90-day investment horizon Cousins Properties Incorporated is expected to generate 1.31 times more return on investment than Omega Healthcare. However, Cousins Properties is 1.31 times more volatile than Omega Healthcare Investors. It trades about 0.08 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.1 per unit of risk. If you would invest 2,248 in Cousins Properties Incorporated on November 9, 2024 and sell it today you would earn a total of 818.00 from holding Cousins Properties Incorporated or generate 36.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cousins Properties Incorporate vs. Omega Healthcare Investors
Performance |
| Timeline |
| Cousins Properties |
| Omega Healthcare Inv |
Cousins Properties and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cousins Properties and Omega Healthcare
The main advantage of trading using opposite Cousins Properties and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cousins Properties 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.| Cousins Properties vs. Highwoods Properties | Cousins Properties vs. Douglas Emmett | Cousins Properties vs. Equity Commonwealth | Cousins Properties vs. Kilroy Realty 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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