Correlation Between Omega Healthcare and Ready Capital
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Ready 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 Ready 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 Ready Capital Corp, you can compare the effects of market volatilities on Omega Healthcare and Ready 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 Ready Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Ready Capital.
Diversification Opportunities for Omega Healthcare and Ready Capital
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Omega and Ready is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Ready Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ready Capital Corp 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 Ready Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ready Capital Corp has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Ready Capital go up and down completely randomly.
Pair Corralation between Omega Healthcare and Ready Capital
Considering the 90-day investment horizon Omega Healthcare Investors is expected to generate 0.71 times more return on investment than Ready Capital. However, Omega Healthcare Investors is 1.41 times less risky than Ready Capital. It trades about 0.08 of its potential returns per unit of risk. Ready Capital Corp is currently generating about -0.02 per unit of risk. If you would invest 2,506 in Omega Healthcare Investors on August 26, 2024 and sell it today you would earn a total of 1,505 from holding Omega Healthcare Investors or generate 60.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Ready Capital Corp
Performance |
| Timeline |
| Omega Healthcare Inv |
| Ready Capital Corp |
Omega Healthcare and Ready Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Ready Capital
The main advantage of trading using opposite Omega Healthcare and Ready Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Ready 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 Ready Capital will offset losses from the drop in Ready 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 |
| Ready Capital vs. Blackstone Mortgage Trust | Ready Capital vs. Omega Healthcare Investors | Ready 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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