Correlation Between Omega Healthcare and GSTechnologies

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

Diversification Opportunities for Omega Healthcare and GSTechnologies

0.0

Correlation Coefficient

Omega Healthcare  GSTechnologies

Pay attention - limited upside

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

Pair Corralation between Omega Healthcare and GSTechnologies

If you would invest  2,377  in Omega Healthcare Investors on October 4, 2024 and sell it today you would earn a total of  1,419  from holding Omega Healthcare Investors or generate 59.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Omega Healthcare Investors  vs.  GSTechnologies

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 comparatively stable basic indicators, Omega Healthcare is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

GSTechnologies

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GSTechnologies are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, GSTechnologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Omega Healthcare and GSTechnologies

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

The idea behind Omega Healthcare Investors and GSTechnologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.