Correlation Between Select Medical and ATI Physical
Can any of the company-specific risk be diversified away by investing in both Select Medical and ATI Physical 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 ATI Physical 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 ATI Physical Therapy, you can compare the effects of market volatilities on Select Medical and ATI Physical 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 ATI Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and ATI Physical.
Diversification Opportunities for Select Medical and ATI Physical
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Select and ATI is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy 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 ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Select Medical i.e., Select Medical and ATI Physical go up and down completely randomly.
Pair Corralation between Select Medical and ATI Physical
Considering the 90-day investment horizon Select Medical Holdings is expected to generate 0.46 times more return on investment than ATI Physical. However, Select Medical Holdings is 2.18 times less risky than ATI Physical. It trades about 0.1 of its potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.1 per unit of risk. If you would invest 2,560 in Select Medical Holdings on August 28, 2024 and sell it today you would earn a total of 1,310 from holding Select Medical Holdings or generate 51.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Medical Holdings vs. ATI Physical Therapy
Performance |
| Timeline |
| Select Medical Holdings |
| ATI Physical Therapy |
Select Medical and ATI Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Medical and ATI Physical
The main advantage of trading using opposite Select Medical and ATI Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, ATI Physical 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 ATI Physical will offset losses from the drop in ATI Physical'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 |
| ATI Physical vs. Universal Health Services | ATI Physical vs. Lifestance Health Group | ATI Physical vs. Select Medical Holdings | ATI Physical vs. Acadia Healthcare |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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