Correlation Between Cerner Corp and Omnicell

Can any of the company-specific risk be diversified away by investing in both Cerner Corp and Omnicell 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 Cerner Corp and Omnicell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cerner Corp and Omnicell, you can compare the effects of market volatilities on Cerner Corp and Omnicell 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 Cerner Corp with a short position of Omnicell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerner Corp and Omnicell.

Diversification Opportunities for Cerner Corp and Omnicell

0.58

Correlation Coefficient

Cerner Corp  Omnicell

Very weak diversification

The 3 months correlation between Cerner and Omnicell is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cerner Corp and Omnicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicell and Cerner Corp 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 Cerner Corp are associated (or correlated) with Omnicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicell has no effect on the direction of Cerner Corp i.e., Cerner Corp and Omnicell go up and down completely randomly.

Pair Corralation between Cerner Corp and Omnicell

If you would invest  9,492  in Cerner Corp on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Cerner Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Cerner Corp  vs.  Omnicell

Cerner Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cerner Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cerner Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Omnicell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omnicell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cerner Corp and Omnicell

The main advantage of trading using opposite Cerner Corp and Omnicell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerner Corp position performs unexpectedly, Omnicell 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 Omnicell will offset losses from the drop in Omnicell's long position.

The idea behind Cerner Corp and Omnicell pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.