Correlation Between Easy Software and Select Medical
Can any of the company-specific risk be diversified away by investing in both Easy Software 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 Easy Software and Select Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and Select Medical Holdings, you can compare the effects of market volatilities on Easy Software 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 Easy Software with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Select Medical.
Diversification Opportunities for Easy Software and Select Medical
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Easy and Select is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG 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 Easy Software 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 Easy Software AG 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 Easy Software i.e., Easy Software and Select Medical go up and down completely randomly.
Pair Corralation between Easy Software and Select Medical
Assuming the 90 days trading horizon Easy Software AG is expected to generate 0.48 times more return on investment than Select Medical. However, Easy Software AG is 2.07 times less risky than Select Medical. It trades about 0.09 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 1,460 in Easy Software AG on November 3, 2024 and sell it today you would earn a total of 340.00 from holding Easy Software AG or generate 23.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. Select Medical Holdings
Performance |
| Timeline |
| Easy Software AG |
| Select Medical Holdings |
Easy Software and Select Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Select Medical
The main advantage of trading using opposite Easy Software and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software 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.| Easy Software vs. Salesforce | Easy Software vs. SAP SE | Easy Software vs. Uber Technologies | Easy Software vs. PagerDuty |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |