Correlation Between Omega Healthcare and PEAK Old
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and PEAK Old 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 PEAK Old 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 PEAK Old, you can compare the effects of market volatilities on Omega Healthcare and PEAK Old 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 PEAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and PEAK Old.
Diversification Opportunities for Omega Healthcare and PEAK Old
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omega and PEAK is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and PEAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEAK Old 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 PEAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEAK Old has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and PEAK Old go up and down completely randomly.
Pair Corralation between Omega Healthcare and PEAK Old
If you would invest 3,980 in Omega Healthcare Investors on August 27, 2024 and sell it today you would earn a total of 31.00 from holding Omega Healthcare Investors or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.33% |
| Values | Daily Returns |
Omega Healthcare Investors vs. PEAK Old
Performance |
| Timeline |
| Omega Healthcare Inv |
| PEAK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Omega Healthcare and PEAK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and PEAK Old
The main advantage of trading using opposite Omega Healthcare and PEAK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, PEAK Old 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 PEAK Old will offset losses from the drop in PEAK Old'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 |
| PEAK Old vs. Welltower | PEAK Old vs. Mid America Apartment Communities | PEAK Old vs. Regency Centers | PEAK Old vs. UDR Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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