Correlation Between Roebuck Food and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Roebuck Food 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 Roebuck Food and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Omega Healthcare Investors, you can compare the effects of market volatilities on Roebuck Food 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 Roebuck Food with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Omega Healthcare.
Diversification Opportunities for Roebuck Food and Omega Healthcare
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Roebuck and Omega is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group 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 Roebuck Food 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 Roebuck Food Group 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 Roebuck Food i.e., Roebuck Food and Omega Healthcare go up and down completely randomly.
Pair Corralation between Roebuck Food and Omega Healthcare
Assuming the 90 days trading horizon Roebuck Food is expected to generate 1.86 times less return on investment than Omega Healthcare. But when comparing it to its historical volatility, Roebuck Food Group is 1.02 times less risky than Omega Healthcare. It trades about 0.06 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,861 in Omega Healthcare Investors on August 31, 2024 and sell it today you would earn a total of 1,219 from holding Omega Healthcare Investors or generate 42.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roebuck Food Group vs. Omega Healthcare Investors
Performance |
| Timeline |
| Roebuck Food Group |
| Omega Healthcare Inv |
Roebuck Food and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Omega Healthcare
The main advantage of trading using opposite Roebuck Food and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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.| Roebuck Food vs. Wheaton Precious Metals | Roebuck Food vs. International Consolidated Airlines | Roebuck Food vs. Coeur Mining | Roebuck Food vs. CAP LEASE AVIATION |
| Omega Healthcare vs. Neometals | Omega Healthcare vs. Coor Service Management | Omega Healthcare vs. Aeorema Communications Plc | Omega Healthcare vs. JLEN Environmental Assets |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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