Correlation Between Viemed Healthcare and Boston Omaha

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

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

Diversification Opportunities for Viemed Healthcare and Boston Omaha

0.76

Correlation Coefficient

Viemed Healthcare  Boston Omaha

Poor diversification

The 3 months correlation between Viemed and Boston is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Boston Omaha Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Omaha Corp and Viemed 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 Viemed Healthcare are associated (or correlated) with Boston Omaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Omaha Corp has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Boston Omaha go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Boston Omaha

Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the Boston Omaha. But the stock apears to be less risky and, when comparing its historical volatility, Viemed Healthcare is 1.08 times less risky than Boston Omaha. The stock trades about -0.17 of its potential returns per unit of risk. The Boston Omaha Corp is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  1,594  in Boston Omaha Corp on March 3, 2024 and sell it today you would lose (133.00) from holding Boston Omaha Corp or give up 8.34% of portfolio value over 90 days.

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

Viemed Healthcare  vs.  Boston Omaha Corp

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Boston Omaha Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Omaha Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Viemed Healthcare and Boston Omaha

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

The idea behind Viemed Healthcare and Boston Omaha Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.