Correlation Between Select Medical and CryoCell International
Can any of the company-specific risk be diversified away by investing in both Select Medical and CryoCell International 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 CryoCell International 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 CryoCell International, you can compare the effects of market volatilities on Select Medical and CryoCell International 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 CryoCell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and CryoCell International.
Diversification Opportunities for Select Medical and CryoCell International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Select and CryoCell is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and CryoCell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoCell International 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 CryoCell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoCell International has no effect on the direction of Select Medical i.e., Select Medical and CryoCell International go up and down completely randomly.
Pair Corralation between Select Medical and CryoCell International
Considering the 90-day investment horizon Select Medical is expected to generate 1.66 times less return on investment than CryoCell International. But when comparing it to its historical volatility, Select Medical Holdings is 1.24 times less risky than CryoCell International. It trades about 0.12 of its potential returns per unit of risk. CryoCell International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 740.00 in CryoCell International on November 9, 2024 and sell it today you would earn a total of 54.00 from holding CryoCell International or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Medical Holdings vs. CryoCell International
Performance |
| Timeline |
| Select Medical Holdings |
| CryoCell International |
Select Medical and CryoCell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Medical and CryoCell International
The main advantage of trading using opposite Select Medical and CryoCell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, CryoCell International 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 CryoCell International will offset losses from the drop in CryoCell International'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 |
| CryoCell International vs. National HealthCare | CryoCell International vs. InnovAge Holding Corp | CryoCell International vs. Pennant Group | CryoCell International vs. Encompass Health Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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