Correlation Between Live Nation and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Live Nation 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 Live Nation and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Nation Entertainment, and Omega Healthcare Investors,, you can compare the effects of market volatilities on Live Nation 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 Live Nation with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Omega Healthcare.
Diversification Opportunities for Live Nation and Omega Healthcare
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Live and Omega is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment, 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 Live Nation 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 Live Nation Entertainment, 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 Live Nation i.e., Live Nation and Omega Healthcare go up and down completely randomly.
Pair Corralation between Live Nation and Omega Healthcare
Assuming the 90 days trading horizon Live Nation Entertainment, is expected to generate 0.64 times more return on investment than Omega Healthcare. However, Live Nation Entertainment, is 1.56 times less risky than Omega Healthcare. It trades about 0.33 of its potential returns per unit of risk. Omega Healthcare Investors, is currently generating about -0.24 per unit of risk. If you would invest 15,786 in Live Nation Entertainment, on November 5, 2024 and sell it today you would earn a total of 1,061 from holding Live Nation Entertainment, or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Live Nation Entertainment, vs. Omega Healthcare Investors,
Performance |
| Timeline |
| Live Nation Entertai |
| Omega Healthcare Inv |
Live Nation and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Omega Healthcare
The main advantage of trading using opposite Live Nation and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation 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.| Live Nation vs. Intelbras SA | Live Nation vs. Neogrid Participaes SA | Live Nation vs. Mliuz SA | Live Nation vs. Locaweb Servios de |
| Omega Healthcare vs. KB Financial Group | Omega Healthcare vs. MAHLE Metal Leve | Omega Healthcare vs. Prudential Financial | Omega Healthcare vs. Nordon Indstrias Metalrgicas |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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