Correlation Between PureTech Health and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both PureTech Health 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 PureTech Health and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureTech Health plc and Omega Healthcare Investors, you can compare the effects of market volatilities on PureTech Health 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 PureTech Health with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Omega Healthcare.
Diversification Opportunities for PureTech Health and Omega Healthcare
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PureTech and Omega is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc 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 PureTech Health 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 PureTech Health plc 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 PureTech Health i.e., PureTech Health and Omega Healthcare go up and down completely randomly.
Pair Corralation between PureTech Health and Omega Healthcare
Assuming the 90 days trading horizon PureTech Health is expected to generate 1.89 times less return on investment than Omega Healthcare. In addition to that, PureTech Health is 1.98 times more volatile than Omega Healthcare Investors. It trades about 0.03 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.1 per unit of volatility. If you would invest 2,879 in Omega Healthcare Investors on September 14, 2024 and sell it today you would earn a total of 1,004 from holding Omega Healthcare Investors or generate 34.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health plc vs. Omega Healthcare Investors
Performance |
| Timeline |
| PureTech Health plc |
| Omega Healthcare Inv |
PureTech Health and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Omega Healthcare
The main advantage of trading using opposite PureTech Health and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health 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.| PureTech Health vs. Hyundai Motor | PureTech Health vs. Toyota Motor Corp | PureTech Health vs. SoftBank Group Corp | PureTech Health vs. Halyk Bank of |
| Omega Healthcare vs. Samsung Electronics Co | Omega Healthcare vs. Samsung Electronics Co | Omega Healthcare vs. Hyundai Motor | Omega Healthcare vs. Reliance Industries Ltd |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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