Correlation Between Omega Healthcare and Dynex Capital
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Dynex Capital 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 Dynex Capital 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 Dynex Capital, you can compare the effects of market volatilities on Omega Healthcare and Dynex Capital 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 Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Dynex Capital.
Diversification Opportunities for Omega Healthcare and Dynex Capital
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omega and Dynex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital 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 Dynex Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynex Capital has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Dynex Capital go up and down completely randomly.
Pair Corralation between Omega Healthcare and Dynex Capital
Considering the 90-day investment horizon Omega Healthcare Investors is expected to generate 0.93 times more return on investment than Dynex Capital. However, Omega Healthcare Investors is 1.07 times less risky than Dynex Capital. It trades about 0.12 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.07 per unit of risk. If you would invest 2,885 in Omega Healthcare Investors on August 25, 2024 and sell it today you would earn a total of 1,126 from holding Omega Healthcare Investors or generate 39.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Dynex Capital
Performance |
| Timeline |
| Omega Healthcare Inv |
| Dynex Capital |
Omega Healthcare and Dynex Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Dynex Capital
The main advantage of trading using opposite Omega Healthcare and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Dynex Capital 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 Dynex Capital will offset losses from the drop in Dynex Capital's long position.| Omega Healthcare vs. LTC Properties | Omega Healthcare vs. Healthpeak Properties | Omega Healthcare vs. Global Medical REIT | Omega Healthcare vs. Sabra Healthcare REIT |
| Dynex Capital vs. Blackstone Mortgage Trust | Dynex Capital vs. Omega Healthcare Investors | Dynex Capital vs. Medical Properties Trust |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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