Correlation Between Healthier Choices and Om Holdings

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

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

Diversification Opportunities for Healthier Choices and Om Holdings

0.05

Correlation Coefficient

Healthier Choices  Om Holdings

Significant diversification

The 3 months correlation between Healthier and OMHI is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Healthier Choices Management and Om Holdings International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Om Holdings International and Healthier Choices 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 Healthier Choices Management are associated (or correlated) with Om Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Om Holdings International has no effect on the direction of Healthier Choices i.e., Healthier Choices and Om Holdings go up and down completely randomly.

Pair Corralation between Healthier Choices and Om Holdings

Given the investment horizon of 90 days Healthier Choices Management is expected to generate 33.78 times more return on investment than Om Holdings. However, Healthier Choices is 33.78 times more volatile than Om Holdings International. It trades about 0.43 of its potential returns per unit of risk. Om Holdings International is currently generating about -0.12 per unit of risk. If you would invest  0.01  in Healthier Choices Management on September 3, 2024 and sell it today you would lose (0.01) from holding Healthier Choices Management or give up 100.0% of portfolio value over 90 days.

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

Healthier Choices Management  vs.  Om Holdings International

Healthier Choices

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Healthier Choices Management are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, Healthier Choices exhibited solid returns over the last few months and may actually be approaching a breakup point.

Om Holdings International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Om Holdings International 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 technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Healthier Choices and Om Holdings

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

The idea behind Healthier Choices Management and Om Holdings International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.