Correlation Between JD Sports and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Omega Healthcare Investors, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Omega Healthcare.
Diversification Opportunities for JD Sports and Omega Healthcare
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JD Sports and Omega is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion 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 JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Omega Healthcare go up and down completely randomly.
Pair Corralation between JD Sports and Omega Healthcare
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Omega Healthcare. In addition to that, JD Sports is 1.9 times more volatile than Omega Healthcare Investors. It trades about -0.17 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.06 per unit of volatility. If you would invest 3,776 in Omega Healthcare Investors on October 28, 2024 and sell it today you would lose (78.00) from holding Omega Healthcare Investors or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Omega Healthcare Investors
Performance |
| Timeline |
| JD Sports Fashion |
| Omega Healthcare Inv |
JD Sports and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Omega Healthcare
The main advantage of trading using opposite JD Sports and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.| JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co | JD Sports vs. Toyota Motor Corp | JD Sports vs. State Bank of |
| Omega Healthcare vs. Abingdon Health Plc | Omega Healthcare vs. Fevertree Drinks Plc | Omega Healthcare vs. Primary Health Properties | Omega Healthcare vs. Check Point Software |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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