Correlation Between Omega Healthcare and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Boston Properties 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 Omega Healthcare and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omega Healthcare Investors and Boston Properties, you can compare the effects of market volatilities on Omega Healthcare and Boston Properties 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 Omega Healthcare with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Boston Properties.
Diversification Opportunities for Omega Healthcare and Boston Properties
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omega and Boston is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Omega Healthcare 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 Omega Healthcare Investors are associated (or correlated) with Boston Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Properties has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Boston Properties go up and down completely randomly.
Pair Corralation between Omega Healthcare and Boston Properties
Considering the 90-day investment horizon Omega Healthcare Investors is expected to under-perform the Boston Properties. In addition to that, Omega Healthcare is 1.05 times more volatile than Boston Properties. It trades about -0.01 of its total potential returns per unit of risk. Boston Properties is currently generating about 0.0 per unit of volatility. If you would invest 8,033 in Boston Properties on September 4, 2024 and sell it today you would lose (18.00) from holding Boston Properties or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Boston Properties
Performance |
| Timeline |
| Omega Healthcare Inv |
| Boston Properties |
Omega Healthcare and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Boston Properties
The main advantage of trading using opposite Omega Healthcare and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Boston Properties 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 Boston Properties will offset losses from the drop in Boston Properties' long position.| Omega Healthcare vs. Boston Properties | Omega Healthcare vs. Douglas Emmett | Omega Healthcare vs. Alexandria Real Estate | Omega Healthcare vs. Vornado Realty Trust |
| Boston Properties vs. SL Green Realty | Boston Properties vs. Douglas Emmett | Boston Properties vs. Kilroy Realty Corp | Boston Properties vs. Alexandria Real Estate |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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