Correlation Between HE Equipment and Omni Health

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

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

Diversification Opportunities for HE Equipment and Omni Health

0.0

Correlation Coefficient

HE Equipment  Omni Health

Pay attention - limited upside

The 3 months correlation between HEES and Omni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Omni Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Health and HE Equipment 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 HE Equipment Services are associated (or correlated) with Omni Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Health has no effect on the direction of HE Equipment i.e., HE Equipment and Omni Health go up and down completely randomly.

Pair Corralation between HE Equipment and Omni Health

If you would invest  4,464  in HE Equipment Services on September 16, 2024 and sell it today you would earn a total of  1,125  from holding HE Equipment Services or generate 25.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

HE Equipment Services  vs.  Omni Health

HE Equipment Services

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HE Equipment Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, HE Equipment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Omni Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omni Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Omni Health is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HE Equipment and Omni Health

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

The idea behind HE Equipment Services and Omni Health 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.