Correlation Between Pure Storage, and Omega Healthcare

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

By analyzing existing cross correlation between Pure Storage, and Omega Healthcare Investors,, you can compare the effects of market volatilities on Pure Storage, and Omega 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 Pure Storage, with a short position of Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage, and Omega Healthcare.

Diversification Opportunities for Pure Storage, and Omega Healthcare

0.37

Correlation Coefficient

Pure Storage,  Omega Healthcare

Weak diversification

The 3 months correlation between Pure and Omega is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage, and Omega Healthcare Investors, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv and Pure Storage, 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 Pure Storage, are associated (or correlated) with Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Pure Storage, i.e., Pure Storage, and Omega Healthcare go up and down completely randomly.

Pair Corralation between Pure Storage, and Omega Healthcare

Assuming the 90 days trading horizon Pure Storage, is expected to generate 2.28 times more return on investment than Omega Healthcare. However, Pure Storage, is 2.28 times more volatile than Omega Healthcare Investors,. It trades about 0.1 of its potential returns per unit of risk. Omega Healthcare Investors, is currently generating about -0.24 per unit of risk. If you would invest  9,437  in Pure Storage, on October 10, 2024 and sell it today you would earn a total of  403.00  from holding Pure Storage, or generate 4.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pure Storage,  vs.  Omega Healthcare Investors,

Pure Storage,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pure Storage, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Pure Storage, sustained solid returns over the last few months and may actually be approaching a breakup point.

Omega Healthcare Inv

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Pure Storage, and Omega Healthcare

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

The idea behind Pure Storage, and Omega Healthcare Investors, 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.