Correlation Between Omega Healthcare and Barclays PLC
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Barclays PLC 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 Omega Healthcare and Barclays PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omega Healthcare Investors and Barclays PLC ADR, you can compare the effects of market volatilities on Omega Healthcare and Barclays PLC 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 Omega Healthcare with a short position of Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Barclays PLC.
Diversification Opportunities for Omega Healthcare and Barclays PLC
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Omega and Barclays is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Barclays PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC ADR and Omega 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 Omega Healthcare Investors are associated (or correlated) with Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC ADR has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Barclays PLC go up and down completely randomly.
Pair Corralation between Omega Healthcare and Barclays PLC
Considering the 90-day investment horizon Omega Healthcare Investors is expected to under-perform the Barclays PLC. But the stock apears to be less risky and, when comparing its historical volatility, Omega Healthcare Investors is 1.3 times less risky than Barclays PLC. The stock trades about -0.1 of its potential returns per unit of risk. The Barclays PLC ADR is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 811.00 in Barclays PLC ADR on January 20, 2024 and sell it today you would earn a total of 113.00 from holding Barclays PLC ADR or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Barclays PLC ADR
Performance |
| Timeline |
| Omega Healthcare Inv |
| Barclays PLC ADR |
Omega Healthcare and Barclays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Barclays PLC
The main advantage of trading using opposite Omega Healthcare and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Barclays PLC 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.| Omega Healthcare vs. LTC Properties | Omega Healthcare vs. Healthpeak Properties | Omega Healthcare vs. Global Medical REIT | Omega Healthcare vs. Sabra Healthcare REIT |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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