Correlation Between Cohn Steers and Omnia Wellness

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Can any of the company-specific risk be diversified away by investing in both Cohn Steers and Omnia Wellness 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 Cohn Steers and Omnia Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohn Steers and Omnia Wellness, you can compare the effects of market volatilities on Cohn Steers and Omnia Wellness 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 Cohn Steers with a short position of Omnia Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohn Steers and Omnia Wellness.

Diversification Opportunities for Cohn Steers and Omnia Wellness

-0.77
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cohn Steers and Omnia is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cohn Steers and Omnia Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnia Wellness and Cohn Steers 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 Cohn Steers are associated (or correlated) with Omnia Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnia Wellness has no effect on the direction of Cohn Steers i.e., Cohn Steers and Omnia Wellness go up and down completely randomly.

Pair Corralation between Cohn Steers and Omnia Wellness

Considering the 90-day investment horizon Cohn Steers is expected to generate 210.26 times less return on investment than Omnia Wellness. But when comparing it to its historical volatility, Cohn Steers is 12.53 times less risky than Omnia Wellness. It trades about 0.0 of its potential returns per unit of risk. Omnia Wellness is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  41.00  in Omnia Wellness on May 13, 2022 and sell it today you would lose (29.00)  from holding Omnia Wellness or give up 70.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Cohn Steers  vs.  Omnia Wellness

 Performance (%) 
       Timeline  
Cohn Steers 
Cohn Steers Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Cohn Steers are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Cohn Steers may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Cohn Steers Price Channel

Omnia Wellness 
Omnia Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Omnia Wellness are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Omnia Wellness reported solid returns over the last few months and may actually be approaching a breakup point.

Omnia Price Channel

Cohn Steers and Omnia Wellness Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cohn Steers and Omnia Wellness

The main advantage of trading using opposite Cohn Steers and Omnia Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohn Steers position performs unexpectedly, Omnia Wellness 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 Omnia Wellness will offset losses from the drop in Omnia Wellness' long position.
The idea behind Cohn Steers and Omnia Wellness 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.

Omnia Wellness

Pair trading matchups for Omnia Wellness

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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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