Correlation Between GameStop Corp and Omni Health

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

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

Diversification Opportunities for GameStop Corp and Omni Health

0.0

Correlation Coefficient

GameStop Corp  Omni Health

Pay attention - limited upside

The 3 months correlation between GameStop and Omni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Omni Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Health and GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and Omni Health go up and down completely randomly.

Pair Corralation between GameStop Corp and Omni Health

Considering the 90-day investment horizon GameStop Corp is expected to under-perform the Omni Health. But the stock apears to be less risky and, when comparing its historical volatility, GameStop Corp is 71.28 times less risky than Omni Health. The stock trades about -0.17 of its potential returns per unit of risk. The Omni Health is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Omni Health on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Omni Health or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

GameStop Corp  vs.  Omni Health

GameStop Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Omni Health

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Omni Health are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, Omni Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GameStop Corp and Omni Health

The main advantage of trading using opposite GameStop Corp and Omni Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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 GameStop Corp 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.