Correlation Between Healthcare Trust and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Healthcare Trust 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 Healthcare Trust and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Trust and Omega Healthcare Investors, you can compare the effects of market volatilities on Healthcare Trust 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 Healthcare Trust with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Trust and Omega Healthcare.
Diversification Opportunities for Healthcare Trust and Omega Healthcare
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Healthcare and Omega is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Trust 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 Healthcare Trust 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 Healthcare Trust 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 Healthcare Trust i.e., Healthcare Trust and Omega Healthcare go up and down completely randomly.
Pair Corralation between Healthcare Trust and Omega Healthcare
If you would invest 2,667 in Healthcare Trust on January 19, 2024 and sell it today you would earn a total of 0.00 from holding Healthcare Trust or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.81% |
| Values | Daily Returns |
Healthcare Trust vs. Omega Healthcare Investors
Performance |
| Timeline |
| Healthcare Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Omega Healthcare Inv |
Healthcare Trust and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Trust and Omega Healthcare
The main advantage of trading using opposite Healthcare Trust and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Trust 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.| Healthcare Trust vs. Albemarle Corp | Healthcare Trust vs. Herc Holdings | Healthcare Trust vs. Valhi Inc | Healthcare Trust vs. Ecolab Inc |
| Omega Healthcare vs. LTC Properties | Omega Healthcare vs. Healthpeak Properties | Omega Healthcare vs. Global Medical REIT | Omega Healthcare vs. Sabra Healthcare REIT |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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