Correlation Between Omeros and Equitable Holdings

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

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

Diversification Opportunities for Omeros and Equitable Holdings

-0.2

Correlation Coefficient

Omeros  Equitable Holdings

Good diversification

The 3 months correlation between Omeros and Equitable is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Omeros and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings and Omeros 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 Omeros are associated (or correlated) with Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of Omeros i.e., Omeros and Equitable Holdings go up and down completely randomly.

Pair Corralation between Omeros and Equitable Holdings

Assuming the 90 days horizon Omeros is expected to under-perform the Equitable Holdings. In addition to that, Omeros is 2.55 times more volatile than Equitable Holdings. It trades about -0.1 of its total potential returns per unit of risk. Equitable Holdings is currently generating about 0.08 per unit of volatility. If you would invest  4,460  in Equitable Holdings on December 30, 2024 and sell it today you would earn a total of  400.00  from holding Equitable Holdings or generate 8.97% return on investment over 90 days.

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

Omeros  vs.  Equitable Holdings

Omeros

Risk-Adjusted Performance

Very Weak

Over the last 90 days Omeros has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Equitable Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Equitable Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Equitable Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Omeros and Equitable Holdings

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

The idea behind Omeros and Equitable Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.