Correlation Between Dynex Capital and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Dynex Capital 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 Dynex Capital and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Omega Healthcare Investors, you can compare the effects of market volatilities on Dynex Capital 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 Dynex Capital with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Omega Healthcare.
Diversification Opportunities for Dynex Capital and Omega Healthcare
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dynex and Omega is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital 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 Dynex Capital 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 Dynex Capital 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 Dynex Capital i.e., Dynex Capital and Omega Healthcare go up and down completely randomly.
Pair Corralation between Dynex Capital and Omega Healthcare
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.64 times more return on investment than Omega Healthcare. However, Dynex Capital is 1.57 times less risky than Omega Healthcare. It trades about 0.17 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.01 per unit of risk. If you would invest 1,234 in Dynex Capital on September 18, 2024 and sell it today you would earn a total of 23.00 from holding Dynex Capital or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynex Capital vs. Omega Healthcare Investors
Performance |
| Timeline |
| Dynex Capital |
| Omega Healthcare Inv |
Dynex Capital and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Omega Healthcare
The main advantage of trading using opposite Dynex Capital and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital 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.The idea behind Dynex Capital and Omega Healthcare Investors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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