Correlation Between Ryman Healthcare and Omega Healthcare

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

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

Diversification Opportunities for Ryman Healthcare and Omega Healthcare

0.0

Correlation Coefficient

Ryman Healthcare  Omega Healthcare

Pay attention - limited upside

The 3 months correlation between Ryman and Omega is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Healthcare Limited 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 Ryman Healthcare 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 Ryman Healthcare Limited 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 Ryman Healthcare i.e., Ryman Healthcare and Omega Healthcare go up and down completely randomly.

Pair Corralation between Ryman Healthcare and Omega Healthcare

If you would invest (100.00) in Omega Healthcare Investors on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Omega Healthcare Investors or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ryman Healthcare Limited  vs.  Omega Healthcare Investors

Ryman Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryman Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ryman Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Omega Healthcare Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omega Healthcare Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Omega Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ryman Healthcare and Omega Healthcare

The main advantage of trading using opposite Ryman Healthcare and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryman Healthcare 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 Ryman Healthcare Limited 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.