Correlation Between Healthcare Realty and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Healthcare Realty 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 Healthcare Realty and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Realty Trust and Omega Healthcare Investors, you can compare the effects of market volatilities on Healthcare Realty 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 Healthcare Realty with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Omega Healthcare.
Diversification Opportunities for Healthcare Realty and Omega Healthcare
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and Omega is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust 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 Healthcare Realty 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 Healthcare Realty Trust 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 Healthcare Realty i.e., Healthcare Realty and Omega Healthcare go up and down completely randomly.
Pair Corralation between Healthcare Realty and Omega Healthcare
Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to under-perform the Omega Healthcare. In addition to that, Healthcare Realty is 1.0 times more volatile than Omega Healthcare Investors. It trades about -0.05 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.04 per unit of volatility. If you would invest 3,781 in Omega Healthcare Investors on October 20, 2024 and sell it today you would lose (45.00) from holding Omega Healthcare Investors or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Healthcare Realty Trust vs. Omega Healthcare Investors
Performance |
| Timeline |
| Healthcare Realty Trust |
| Omega Healthcare Inv |
Healthcare Realty and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Realty and Omega Healthcare
The main advantage of trading using opposite Healthcare Realty and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty 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.| Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. Sabra Healthcare REIT | Healthcare Realty vs. Community Healthcare Trust | Healthcare Realty vs. Universal Health Realty |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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