Correlation Between Select Medical and GRUPO CARSO
Can any of the company-specific risk be diversified away by investing in both Select Medical and GRUPO CARSO 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 Select Medical and GRUPO CARSO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Medical Holdings and GRUPO CARSO A1, you can compare the effects of market volatilities on Select Medical and GRUPO CARSO 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 Select Medical with a short position of GRUPO CARSO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and GRUPO CARSO.
Diversification Opportunities for Select Medical and GRUPO CARSO
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Select and GRUPO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 and Select Medical 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 Select Medical Holdings are associated (or correlated) with GRUPO CARSO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Select Medical i.e., Select Medical and GRUPO CARSO go up and down completely randomly.
Pair Corralation between Select Medical and GRUPO CARSO
Assuming the 90 days horizon Select Medical Holdings is expected to under-perform the GRUPO CARSO. In addition to that, Select Medical is 3.25 times more volatile than GRUPO CARSO A1. It trades about -0.25 of its total potential returns per unit of risk. GRUPO CARSO A1 is currently generating about -0.04 per unit of volatility. If you would invest 535.00 in GRUPO CARSO A1 on September 13, 2024 and sell it today you would lose (20.00) from holding GRUPO CARSO A1 or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Medical Holdings vs. GRUPO CARSO A1
Performance |
| Timeline |
| Select Medical Holdings |
| GRUPO CARSO A1 |
Select Medical and GRUPO CARSO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Medical and GRUPO CARSO
The main advantage of trading using opposite Select Medical and GRUPO CARSO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, GRUPO CARSO 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 GRUPO CARSO will offset losses from the drop in GRUPO CARSO's long position.| Select Medical vs. Titan Machinery | Select Medical vs. SBI Insurance Group | Select Medical vs. Goosehead Insurance | Select Medical vs. DAIRY FARM INTL |
| GRUPO CARSO vs. Apple Inc | GRUPO CARSO vs. Apple Inc | GRUPO CARSO vs. Apple Inc | GRUPO CARSO vs. Apple Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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