Correlation Between Omega Healthcare and AES
Can any of the company-specific risk be diversified away by investing in both Omega Healthcare and AES 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 Omega Healthcare and AES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omega Healthcare Investors, and The AES, you can compare the effects of market volatilities on Omega Healthcare and AES 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 Omega Healthcare with a short position of AES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Healthcare and AES.
Diversification Opportunities for Omega Healthcare and AES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Omega and AES is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Omega Healthcare Investors, and The AES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES and Omega 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 Omega Healthcare Investors, are associated (or correlated) with AES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES has no effect on the direction of Omega Healthcare i.e., Omega Healthcare and AES go up and down completely randomly.
Pair Corralation between Omega Healthcare and AES
Assuming the 90 days trading horizon Omega Healthcare is expected to generate 1.45 times less return on investment than AES. But when comparing it to its historical volatility, Omega Healthcare Investors, is 1.65 times less risky than AES. It trades about 0.07 of its potential returns per unit of risk. The AES is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,835 in The AES on September 5, 2025 and sell it today you would earn a total of 630.00 from holding The AES or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Omega Healthcare Investors, vs. The AES
Performance |
| Timeline |
| Omega Healthcare Inv |
Risk-Adjusted Performance
Mild
Weak | Strong |
| AES |
Omega Healthcare and AES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Healthcare and AES
The main advantage of trading using opposite Omega Healthcare and AES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Healthcare position performs unexpectedly, AES 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 AES will offset losses from the drop in AES's long position.| Omega Healthcare vs. Rbr Top Offices | Omega Healthcare vs. MAHLE Metal Leve | Omega Healthcare vs. Metalfrio Solutions SA | Omega Healthcare vs. Monster Beverage |
| AES vs. Annaly Capital Management, | AES vs. Metalfrio Solutions SA | AES vs. ON Semiconductor | AES vs. Taiwan Semiconductor Manufacturing |
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.
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