Correlation Between Nasdaq and Omni Health

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

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

Diversification Opportunities for Nasdaq and Omni Health

0.0

Correlation Coefficient

Nasdaq  Omni Health

Pay attention - limited upside

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

Pair Corralation between Nasdaq and Omni Health

If you would invest  8,141  in Nasdaq Inc on December 2, 2024 and sell it today you would earn a total of  137.00  from holding Nasdaq Inc or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Nasdaq Inc  vs.  Omni Health

Nasdaq Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Omni Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Omni Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Omni Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nasdaq and Omni Health

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

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.