Correlation Between Oasis Hotel and American Healthcare

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

By analyzing existing cross correlation between Oasis Hotel Resort and American Healthcare REIT,, you can compare the effects of market volatilities on Oasis Hotel and American Healthcare 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 Oasis Hotel with a short position of American Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oasis Hotel and American Healthcare.

Diversification Opportunities for Oasis Hotel and American Healthcare

0.0

Correlation Coefficient

Oasis Hotel  American Healthcare

Pay attention - limited upside

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

Pair Corralation between Oasis Hotel and American Healthcare

If you would invest  1,265  in American Healthcare REIT, on September 20, 2024 and sell it today you would earn a total of  1,473  from holding American Healthcare REIT, or generate 116.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.31%
Values	Daily Returns

Oasis Hotel Resort  vs.  American Healthcare REIT,

Oasis Hotel Resort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oasis Hotel Resort has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Oasis Hotel is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

American Healthcare REIT,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Healthcare REIT, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical indicators, American Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Oasis Hotel and American Healthcare

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

The idea behind Oasis Hotel Resort and American Healthcare REIT, 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.