Correlation Between Omega Healthcare and Southern BancShares
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Southern BancShares 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 Southern BancShares 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 Southern BancShares PFD, you can compare the effects of market volatilities on Omega Healthcare and Southern BancShares 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 Southern BancShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Southern BancShares.
Diversification Opportunities for Omega Healthcare and Southern BancShares
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omega and Southern is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Southern BancShares PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern BancShares PFD 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 Southern BancShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern BancShares PFD has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Southern BancShares go up and down completely randomly.
Pair Corralation between Omega Healthcare and Southern BancShares
Considering the 90-day investment horizon Omega Healthcare Investors is expected to generate 2.3 times more return on investment than Southern BancShares. However, Omega Healthcare is 2.3 times more volatile than Southern BancShares PFD. It trades about -0.08 of its potential returns per unit of risk. Southern BancShares PFD is currently generating about -0.21 per unit of risk. If you would invest 4,178 in Omega Healthcare Investors on September 1, 2024 and sell it today you would lose (117.00) from holding Omega Healthcare Investors or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Southern BancShares PFD
Performance |
| Timeline |
| Omega Healthcare Inv |
| Southern BancShares PFD |
Omega Healthcare and Southern BancShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Southern BancShares
The main advantage of trading using opposite Omega Healthcare and Southern BancShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Southern BancShares 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 Southern BancShares will offset losses from the drop in Southern BancShares' long position.| Omega Healthcare vs. LTC Properties | Omega Healthcare vs. Healthpeak Properties | Omega Healthcare vs. Global Medical REIT | Omega Healthcare vs. Sabra Healthcare REIT |
| Southern BancShares vs. Niagara Mohawk Power | Southern BancShares vs. The Siam Cement | Southern BancShares vs. Oaktree Capital Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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