Correlation Between Okta and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Okta and Omega Healthcare 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 Okta and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Omega Healthcare Investors, you can compare the effects of market volatilities on Okta and Omega Healthcare 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 Okta with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Omega Healthcare.
Diversification Opportunities for Okta and Omega Healthcare
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Omega is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv and Okta 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 Okta Inc are associated (or correlated) with Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Okta i.e., Okta and Omega Healthcare go up and down completely randomly.
Pair Corralation between Okta and Omega Healthcare
Given the investment horizon of 90 days Okta Inc is expected to under-perform the Omega Healthcare. In addition to that, Okta is 1.75 times more volatile than Omega Healthcare Investors. It trades about -0.01 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.12 per unit of volatility. If you would invest 2,544 in Omega Healthcare Investors on August 25, 2024 and sell it today you would earn a total of 1,274 from holding Omega Healthcare Investors or generate 50.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.28% |
| Values | Daily Returns |
Okta Inc vs. Omega Healthcare Investors
Performance |
| Timeline |
| Okta Inc |
| Omega Healthcare Inv |
Okta and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Omega Healthcare
The main advantage of trading using opposite Okta and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.The idea behind Okta Inc and Omega Healthcare Investors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Omega Healthcare vs. Welltower | Omega Healthcare vs. Medical Properties Trust | Omega Healthcare vs. Sabra Health Care | Omega Healthcare vs. National Health Investors |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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