Correlation Between Spire Healthcare and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare 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 Spire Healthcare and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and Omega Healthcare Investors, you can compare the effects of market volatilities on Spire Healthcare 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 Spire Healthcare with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Omega Healthcare.
Diversification Opportunities for Spire Healthcare and Omega Healthcare
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and Omega is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare 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 Spire 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 Spire Healthcare 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 Spire Healthcare i.e., Spire Healthcare and Omega Healthcare go up and down completely randomly.
Pair Corralation between Spire Healthcare and Omega Healthcare
Assuming the 90 days trading horizon Spire Healthcare Group is expected to under-perform the Omega Healthcare. In addition to that, Spire Healthcare is 1.07 times more volatile than Omega Healthcare Investors. It trades about -0.13 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.05 per unit of volatility. If you would invest 3,934 in Omega Healthcare Investors on September 2, 2024 and sell it today you would earn a total of 138.00 from holding Omega Healthcare Investors or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Healthcare Group vs. Omega Healthcare Investors
Performance |
| Timeline |
| Spire Healthcare |
| Omega Healthcare Inv |
Spire Healthcare and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Omega Healthcare
The main advantage of trading using opposite Spire Healthcare and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare 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.| Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Hyundai Motor | Spire Healthcare vs. Toyota Motor Corp |
| Omega Healthcare vs. Uniper SE | Omega Healthcare vs. Mulberry Group PLC | Omega Healthcare vs. London Security Plc | Omega Healthcare vs. Triad Group PLC |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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