Correlation Between SBI Insurance and Select Medical
Can any of the company-specific risk be diversified away by investing in both SBI Insurance 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 SBI Insurance and Select Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and Select Medical Holdings, you can compare the effects of market volatilities on SBI Insurance 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 SBI Insurance with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Select Medical.
Diversification Opportunities for SBI Insurance and Select Medical
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBI and Select is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group 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 SBI Insurance 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 SBI Insurance Group 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 SBI Insurance i.e., SBI Insurance and Select Medical go up and down completely randomly.
Pair Corralation between SBI Insurance and Select Medical
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.14 times more return on investment than Select Medical. However, SBI Insurance Group is 7.03 times less risky than Select Medical. It trades about 0.32 of its potential returns per unit of risk. Select Medical Holdings is currently generating about -0.25 per unit of risk. If you would invest 565.00 in SBI Insurance Group on September 13, 2024 and sell it today you would earn a total of 55.00 from holding SBI Insurance Group or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. Select Medical Holdings
Performance |
| Timeline |
| SBI Insurance Group |
| Select Medical Holdings |
SBI Insurance and Select Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and Select Medical
The main advantage of trading using opposite SBI Insurance and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance 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.| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
| Select Medical vs. Titan Machinery | Select Medical vs. SBI Insurance Group | Select Medical vs. Goosehead Insurance | Select Medical vs. DAIRY FARM INTL |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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