Correlation Between Eversource Energy and Omega Therapeutics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Eversource Energy and Omega Therapeutics 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 Eversource Energy and Omega Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eversource Energy and Omega Therapeutics, you can compare the effects of market volatilities on Eversource Energy and Omega Therapeutics 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 Eversource Energy with a short position of Omega Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eversource Energy and Omega Therapeutics.

Diversification Opportunities for Eversource Energy and Omega Therapeutics

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Eversource and Omega is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eversource Energy and Omega Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Therapeutics and Eversource Energy 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 Eversource Energy are associated (or correlated) with Omega Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Therapeutics has no effect on the direction of Eversource Energy i.e., Eversource Energy and Omega Therapeutics go up and down completely randomly.

Pair Corralation between Eversource Energy and Omega Therapeutics

Allowing for the 90-day total investment horizon Eversource Energy is expected to generate 4.66 times less return on investment than Omega Therapeutics. But when comparing it to its historical volatility, Eversource Energy is 2.71 times less risky than Omega Therapeutics. It trades about 0.22 of its potential returns per unit of risk. Omega Therapeutics is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  481.00  in Omega Therapeutics on September 1, 2022 and sell it today you would earn a total of  219.00  from holding Omega Therapeutics or generate 45.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Eversource Energy  vs.  Omega Therapeutics

 Performance (%) 
       Timeline  
Eversource Energy 
Eversource Performance
0 of 100
Over the last 90 days Eversource Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Eversource Price Channel

Omega Therapeutics 
Omega Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Omega Therapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Omega Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Omega Price Channel

Eversource Energy and Omega Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eversource Energy and Omega Therapeutics

The main advantage of trading using opposite Eversource Energy and Omega Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eversource Energy position performs unexpectedly, Omega Therapeutics 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 Therapeutics will offset losses from the drop in Omega Therapeutics' long position.
Eversource Energy vs. Brookfield Infrastructure Partners
The idea behind Eversource Energy and Omega Therapeutics 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.
Omega Therapeutics vs. Vertex Pharmaceutic
Omega Therapeutics vs. Siemens Ag ADR
Omega Therapeutics vs. Regeneron Pharmaceuticals
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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go