Correlation Between Omega Healthcare and Golden Star
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Golden Star 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 Golden Star 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 Golden Star Resource, you can compare the effects of market volatilities on Omega Healthcare and Golden Star 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 Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Golden Star.
Diversification Opportunities for Omega Healthcare and Golden Star
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Omega and Golden is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Golden Star Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Resource 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 Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Resource has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Golden Star go up and down completely randomly.
Pair Corralation between Omega Healthcare and Golden Star
Considering the 90-day investment horizon Omega Healthcare is expected to generate 2.8 times less return on investment than Golden Star. But when comparing it to its historical volatility, Omega Healthcare Investors is 1.68 times less risky than Golden Star. It trades about 0.08 of its potential returns per unit of risk. Golden Star Resource is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Golden Star Resource on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Golden Star Resource or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Golden Star Resource
Performance |
| Timeline |
| Omega Healthcare Inv |
| Golden Star Resource |
Omega Healthcare and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Golden Star
The main advantage of trading using opposite Omega Healthcare and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star'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 |
| Golden Star vs. China Aircraft Leasing | Golden Star vs. NetSol Technologies | Golden Star vs. Zhihu Inc ADR | Golden Star vs. Q2 Holdings |
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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