Correlation Between AAC TECHNOLOGHLDGADR and Select Medical
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Select Medical 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 AAC TECHNOLOGHLDGADR and Select Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Select Medical Holdings, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Select Medical 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 AAC TECHNOLOGHLDGADR with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Select Medical.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Select Medical
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AAC and Select is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Select Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Medical Holdings and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with Select Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Medical Holdings has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Select Medical go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Select Medical
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 0.76 times more return on investment than Select Medical. However, AAC TECHNOLOGHLDGADR is 1.31 times less risky than Select Medical. It trades about 0.14 of its potential returns per unit of risk. Select Medical Holdings is currently generating about -0.05 per unit of risk. If you would invest 284.00 in AAC TECHNOLOGHLDGADR on November 3, 2024 and sell it today you would earn a total of 190.00 from holding AAC TECHNOLOGHLDGADR or generate 66.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Select Medical Holdings
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Select Medical Holdings |
AAC TECHNOLOGHLDGADR and Select Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Select Medical
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Select Medical 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 Select Medical will offset losses from the drop in Select Medical's long position.| AAC TECHNOLOGHLDGADR vs. MARKET VECTR RETAIL | AAC TECHNOLOGHLDGADR vs. Caseys General Stores | AAC TECHNOLOGHLDGADR vs. National Retail Properties | AAC TECHNOLOGHLDGADR vs. Northern Data AG |
| Select Medical vs. PLAYMATES TOYS | Select Medical vs. SILVER BULLET DATA | Select Medical vs. Linedata Services SA | Select Medical vs. Automatic Data Processing |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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