Correlation Between Fresenius Medical and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical 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 Fresenius Medical and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresenius Medical Care and Omega Healthcare Investors,, you can compare the effects of market volatilities on Fresenius Medical 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 Fresenius Medical with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Omega Healthcare.
Diversification Opportunities for Fresenius Medical and Omega Healthcare
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresenius and Omega is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care 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 Fresenius Medical 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 Fresenius Medical Care 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 Fresenius Medical i.e., Fresenius Medical and Omega Healthcare go up and down completely randomly.
Pair Corralation between Fresenius Medical and Omega Healthcare
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 5.02 times more return on investment than Omega Healthcare. However, Fresenius Medical is 5.02 times more volatile than Omega Healthcare Investors,. It trades about 0.23 of its potential returns per unit of risk. Omega Healthcare Investors, is currently generating about -0.27 per unit of risk. If you would invest 10,945 in Fresenius Medical Care on October 11, 2024 and sell it today you would earn a total of 2,744 from holding Fresenius Medical Care or generate 25.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Fresenius Medical Care vs. Omega Healthcare Investors,
Performance |
| Timeline |
| Fresenius Medical Care |
| Omega Healthcare Inv |
Fresenius Medical and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Omega Healthcare
The main advantage of trading using opposite Fresenius Medical and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical 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.| Fresenius Medical vs. Taiwan Semiconductor Manufacturing | Fresenius Medical vs. Apple Inc | Fresenius Medical vs. Alibaba Group Holding | Fresenius Medical vs. Microsoft |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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