Correlation Between Select Medical and Aesthetic Medical
Can any of the company-specific risk be diversified away by investing in both Select Medical and Aesthetic 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 Select Medical and Aesthetic Medical 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 Aesthetic Medical Intl, you can compare the effects of market volatilities on Select Medical and Aesthetic 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 Select Medical with a short position of Aesthetic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and Aesthetic Medical.
Diversification Opportunities for Select Medical and Aesthetic Medical
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Select and Aesthetic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and Aesthetic Medical Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesthetic Medical Intl 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 Aesthetic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesthetic Medical Intl has no effect on the direction of Select Medical i.e., Select Medical and Aesthetic Medical go up and down completely randomly.
Pair Corralation between Select Medical and Aesthetic Medical
Considering the 90-day investment horizon Select Medical is expected to generate 2.37 times less return on investment than Aesthetic Medical. But when comparing it to its historical volatility, Select Medical Holdings is 5.67 times less risky than Aesthetic Medical. It trades about 0.06 of its potential returns per unit of risk. Aesthetic Medical Intl is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 136.00 in Aesthetic Medical Intl on August 24, 2024 and sell it today you would lose (104.00) from holding Aesthetic Medical Intl or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.66% |
| Values | Daily Returns |
Select Medical Holdings vs. Aesthetic Medical Intl
Performance |
| Timeline |
| Select Medical Holdings |
| Aesthetic Medical Intl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Select Medical and Aesthetic Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Medical and Aesthetic Medical
The main advantage of trading using opposite Select Medical and Aesthetic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, Aesthetic 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 Aesthetic Medical will offset losses from the drop in Aesthetic Medical's long position.| Select Medical vs. The Ensign Group | Select Medical vs. Encompass Health Corp | Select Medical vs. InnovAge Holding Corp | Select Medical vs. Enhabit |
| Aesthetic Medical vs. Jack Nathan Medical | Aesthetic Medical vs. Medical Facilities | Aesthetic Medical vs. Fresenius SE Co | Aesthetic Medical vs. Ramsay Health Care |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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