Correlation Between Omega Healthcare and KKR Real
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and KKR Real 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 KKR Real 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 KKR Real Estate, you can compare the effects of market volatilities on Omega Healthcare and KKR Real 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 KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and KKR Real.
Diversification Opportunities for Omega Healthcare and KKR Real
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Omega and KKR is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and KKR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Real Estate 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 KKR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Real Estate has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and KKR Real go up and down completely randomly.
Pair Corralation between Omega Healthcare and KKR Real
Considering the 90-day investment horizon Omega Healthcare is expected to generate 1.08 times less return on investment than KKR Real. But when comparing it to its historical volatility, Omega Healthcare Investors is 1.76 times less risky than KKR Real. It trades about 0.19 of its potential returns per unit of risk. KKR Real Estate is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 902.00 in KKR Real Estate on September 3, 2024 and sell it today you would earn a total of 261.00 from holding KKR Real Estate or generate 28.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. KKR Real Estate
Performance |
| Timeline |
| Omega Healthcare Inv |
| KKR Real Estate |
Omega Healthcare and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and KKR Real
The main advantage of trading using opposite Omega Healthcare and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, KKR Real 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 KKR Real will offset losses from the drop in KKR Real's long position.| Omega Healthcare vs. Community Healthcare Trust | Omega Healthcare vs. Global Medical REIT | Omega Healthcare vs. CareTrust REIT | Omega Healthcare vs. Welltower |
| KKR Real vs. Ellington Financial | KKR Real vs. Dynex Capital | KKR Real vs. Ares Commercial Real | KKR Real vs. Cherry Hill Mortgage |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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