Correlation Between Global Medical and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Global 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 Global 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 Global Medical REIT and Omega Healthcare Investors, you can compare the effects of market volatilities on Global 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 Global Medical with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Medical and Omega Healthcare.
Diversification Opportunities for Global Medical and Omega Healthcare
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Omega is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT 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 Global 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 Global Medical REIT 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 Global Medical i.e., Global Medical and Omega Healthcare go up and down completely randomly.
Pair Corralation between Global Medical and Omega Healthcare
Given the investment horizon of 90 days Global Medical REIT is expected to under-perform the Omega Healthcare. In addition to that, Global Medical is 2.04 times more volatile than Omega Healthcare Investors. It trades about -0.29 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.02 per unit of volatility. If you would invest 3,822 in Omega Healthcare Investors on January 14, 2025 and sell it today you would lose (37.00) from holding Omega Healthcare Investors or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Medical REIT vs. Omega Healthcare Investors
Performance |
| Timeline |
| Global Medical REIT |
| Omega Healthcare Inv |
Global Medical and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Medical and Omega Healthcare
The main advantage of trading using opposite Global Medical and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global 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.| Global Medical vs. Healthpeak Properties | Global Medical vs. Ventas Inc | Global Medical vs. National Health Investors | Global Medical vs. Sabra Healthcare REIT |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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