Correlation Between Young Cos and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Omega Healthcare Investors, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Omega Healthcare.
Diversification Opportunities for Young Cos and Omega Healthcare
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Young and Omega is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery 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 Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Omega Healthcare go up and down completely randomly.
Pair Corralation between Young Cos and Omega Healthcare
Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 0.86 times more return on investment than Omega Healthcare. However, Young Cos Brewery is 1.16 times less risky than Omega Healthcare. It trades about 0.11 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.04 per unit of risk. If you would invest 60,490 in Young Cos Brewery on August 27, 2024 and sell it today you would earn a total of 2,110 from holding Young Cos Brewery or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Young Cos Brewery vs. Omega Healthcare Investors
Performance |
| Timeline |
| Young Cos Brewery |
| Omega Healthcare Inv |
Young Cos and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Omega Healthcare
The main advantage of trading using opposite Young Cos and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co | Young Cos vs. Toyota Motor Corp | Young Cos vs. Hon Hai Precision |
| Omega Healthcare vs. Young Cos Brewery | Omega Healthcare vs. Vulcan Materials Co | Omega Healthcare vs. National Beverage Corp | Omega Healthcare vs. Retail Estates NV |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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