Correlation Between Ross Stores and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Ross Stores 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 Ross Stores and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Omega Healthcare Investors,, you can compare the effects of market volatilities on Ross Stores 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 Ross Stores with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Omega Healthcare.
Diversification Opportunities for Ross Stores and Omega Healthcare
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ross and Omega is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores 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 Ross Stores 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 Ross Stores 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 Ross Stores i.e., Ross Stores and Omega Healthcare go up and down completely randomly.
Pair Corralation between Ross Stores and Omega Healthcare
Assuming the 90 days trading horizon Ross Stores is expected to generate 0.28 times more return on investment than Omega Healthcare. However, Ross Stores is 3.58 times less risky than Omega Healthcare. It trades about -0.41 of its potential returns per unit of risk. Omega Healthcare Investors, is currently generating about -0.25 per unit of risk. If you would invest 45,632 in Ross Stores on October 28, 2024 and sell it today you would lose (1,403) from holding Ross Stores or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Omega Healthcare Investors,
Performance |
| Timeline |
| Ross Stores |
| Omega Healthcare Inv |
Ross Stores and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Omega Healthcare
The main advantage of trading using opposite Ross Stores and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores 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.| Ross Stores vs. Liberty Broadband | Ross Stores vs. Paycom Software | Ross Stores vs. Live Nation Entertainment, | Ross Stores vs. United Airlines Holdings |
| Omega Healthcare vs. Zoom Video Communications | Omega Healthcare vs. Westinghouse Air Brake | Omega Healthcare vs. Ares Management | Omega Healthcare vs. Datadog, |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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