Correlation Between Omni Health and ALLSTATE

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

By analyzing existing cross correlation between Omni Health and ALLSTATE P 555, you can compare the effects of market volatilities on Omni Health and ALLSTATE 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 Omni Health with a short position of ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Health and ALLSTATE.

Diversification Opportunities for Omni Health and ALLSTATE

0.0

Correlation Coefficient

Omni Health  ALLSTATE

Pay attention - limited upside

The 3 months correlation between Omni and ALLSTATE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Omni Health and ALLSTATE P 555 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLSTATE P 555 and Omni Health 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 Omni Health are associated (or correlated) with ALLSTATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLSTATE P 555 has no effect on the direction of Omni Health i.e., Omni Health and ALLSTATE go up and down completely randomly.

Pair Corralation between Omni Health and ALLSTATE

Given the investment horizon of 90 days Omni Health is expected to generate 77.66 times more return on investment than ALLSTATE. However, Omni Health is 77.66 times more volatile than ALLSTATE P 555. It trades about 0.13 of its potential returns per unit of risk. ALLSTATE P 555 is currently generating about 0.05 per unit of risk. If you would invest  0.00  in Omni Health on December 24, 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	93.33%
Values	Daily Returns

Omni Health  vs.  ALLSTATE P 555

Omni Health

Risk-Adjusted Performance

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.

ALLSTATE P 555

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ALLSTATE P 555 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALLSTATE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Omni Health and ALLSTATE

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

The idea behind Omni Health and ALLSTATE P 555 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.