Correlation Between Annaly Capital and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Annaly Capital 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 Annaly Capital and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Annaly Capital Management, and Omega Healthcare Investors,, you can compare the effects of market volatilities on Annaly Capital 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 Annaly Capital with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annaly Capital and Omega Healthcare.
Diversification Opportunities for Annaly Capital and Omega Healthcare
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Annaly and Omega is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management, 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 Annaly Capital 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 Annaly Capital Management, 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 Annaly Capital i.e., Annaly Capital and Omega Healthcare go up and down completely randomly.
Pair Corralation between Annaly Capital and Omega Healthcare
Assuming the 90 days trading horizon Annaly Capital Management, is expected to generate 1.04 times more return on investment than Omega Healthcare. However, Annaly Capital is 1.04 times more volatile than Omega Healthcare Investors,. It trades about 0.12 of its potential returns per unit of risk. Omega Healthcare Investors, is currently generating about -0.25 per unit of risk. If you would invest 11,308 in Annaly Capital Management, on October 28, 2024 and sell it today you would earn a total of 292.00 from holding Annaly Capital Management, or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Annaly Capital Management, vs. Omega Healthcare Investors,
Performance |
| Timeline |
| Annaly Capital Manag |
| Omega Healthcare Inv |
Annaly Capital and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Annaly Capital and Omega Healthcare
The main advantage of trading using opposite Annaly Capital and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital 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.| Annaly Capital vs. Tyson Foods | Annaly Capital vs. United Airlines Holdings | Annaly Capital vs. Lloyds Banking Group | Annaly Capital vs. Patria Investments Limited |
| Omega Healthcare vs. Zoom Video Communications | Omega Healthcare vs. Westinghouse Air Brake | Omega Healthcare vs. Ares Management | Omega Healthcare vs. Datadog, |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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