Correlation Between Omega Healthcare and Tritax Big

Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and Tritax Big 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 Tritax Big 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 Tritax Big Box, you can compare the effects of market volatilities on Omega Healthcare and Tritax Big 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 Tritax Big. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and Tritax Big.

Diversification Opportunities for Omega Healthcare and Tritax Big

0.6

Correlation Coefficient

Omega Healthcare  Tritax Big

Poor diversification

The 3 months correlation between Omega and Tritax is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors and Tritax Big Box in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tritax Big Box 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 Tritax Big. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tritax Big Box has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and Tritax Big go up and down completely randomly.

Pair Corralation between Omega Healthcare and Tritax Big

Assuming the 90 days trading horizon Omega Healthcare Investors is expected to under-perform the Tritax Big. But the stock apears to be less risky and, when comparing its historical volatility, Omega Healthcare Investors is 1.21 times less risky than Tritax Big. The stock trades about -0.15 of its potential returns per unit of risk. The Tritax Big Box is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  13,870  in Tritax Big Box on October 26, 2024 and sell it today you would earn a total of  390.00  from holding Tritax Big Box or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Omega Healthcare Investors  vs.  Tritax Big Box

Omega Healthcare Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omega Healthcare Investors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Tritax Big Box

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tritax Big Box has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tritax Big is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Omega Healthcare and Tritax Big

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

The idea behind Omega Healthcare Investors and Tritax Big Box 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.