Correlation Between Acres Commercial and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Acres Commercial 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 Acres Commercial and Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acres Commercial Realty and Omega Healthcare Investors, you can compare the effects of market volatilities on Acres Commercial 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 Acres Commercial with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acres Commercial and Omega Healthcare.
Diversification Opportunities for Acres Commercial and Omega Healthcare
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acres and Omega is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Acres Commercial Realty 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 Acres Commercial 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 Acres Commercial Realty 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 Acres Commercial i.e., Acres Commercial and Omega Healthcare go up and down completely randomly.
Pair Corralation between Acres Commercial and Omega Healthcare
Considering the 90-day investment horizon Acres Commercial Realty is expected to generate 1.5 times more return on investment than Omega Healthcare. However, Acres Commercial is 1.5 times more volatile than Omega Healthcare Investors. It trades about 0.01 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.08 per unit of risk. If you would invest 1,595 in Acres Commercial Realty on September 23, 2024 and sell it today you would earn a total of 1.00 from holding Acres Commercial Realty or generate 0.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Acres Commercial Realty vs. Omega Healthcare Investors
Performance |
Timeline |
Acres Commercial Realty |
Omega Healthcare Inv |
Acres Commercial and Omega Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acres Commercial and Omega Healthcare
The main advantage of trading using opposite Acres Commercial and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acres Commercial 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.Acres Commercial vs. Ellington Residential Mortgage | ||
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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