Correlation Between Omega Healthcare and Windrock Land
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Windrock Land 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 Windrock Land 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 Windrock Land Co, you can compare the effects of market volatilities on Omega Healthcare and Windrock Land 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 Windrock Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Windrock Land.
Diversification Opportunities for Omega Healthcare and Windrock Land
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Omega and Windrock is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Windrock Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windrock Land 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 Windrock Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windrock Land has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Windrock Land go up and down completely randomly.
Pair Corralation between Omega Healthcare and Windrock Land
Considering the 90-day investment horizon Omega Healthcare Investors is expected to generate 0.69 times more return on investment than Windrock Land. However, Omega Healthcare Investors is 1.45 times less risky than Windrock Land. It trades about 0.08 of its potential returns per unit of risk. Windrock Land Co is currently generating about 0.01 per unit of risk. If you would invest 2,529 in Omega Healthcare Investors on August 29, 2024 and sell it today you would earn a total of 1,548 from holding Omega Healthcare Investors or generate 61.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Windrock Land Co
Performance |
| Timeline |
| Omega Healthcare Inv |
| Windrock Land |
Omega Healthcare and Windrock Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Windrock Land
The main advantage of trading using opposite Omega Healthcare and Windrock Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Windrock Land 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 Windrock Land will offset losses from the drop in Windrock Land'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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