Correlation Between Omega Healthcare and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Vanguard Value 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 Vanguard Value 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 Vanguard Value Index, you can compare the effects of market volatilities on Omega Healthcare and Vanguard Value 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 Vanguard Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Vanguard Value.
Diversification Opportunities for Omega Healthcare and Vanguard Value
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Omega and Vanguard is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Vanguard Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index 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 Vanguard Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Vanguard Value go up and down completely randomly.
Pair Corralation between Omega Healthcare and Vanguard Value
Considering the 90-day investment horizon Omega Healthcare Investors is expected to generate 1.81 times more return on investment than Vanguard Value. However, Omega Healthcare is 1.81 times more volatile than Vanguard Value Index. It trades about -0.03 of its potential returns per unit of risk. Vanguard Value Index is currently generating about -0.07 per unit of risk. If you would invest 3,099 in Omega Healthcare Investors on January 25, 2024 and sell it today you would lose (31.00) from holding Omega Healthcare Investors or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omega Healthcare Investors vs. Vanguard Value Index
Performance |
| Timeline |
| Omega Healthcare Inv |
| Vanguard Value Index |
Omega Healthcare and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and Vanguard Value
The main advantage of trading using opposite Omega Healthcare and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, Vanguard Value 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 Vanguard Value will offset losses from the drop in Vanguard Value'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 |
| Vanguard Value vs. Edgewood Growth Fund | Vanguard Value vs. Hartford Schroders Emerging | Vanguard Value vs. HUMANA INC | Vanguard Value vs. Aquagold International |
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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