Correlation Between Select Medical and Surgery Partners
Can any of the company-specific risk be diversified away by investing in both Select Medical and Surgery Partners 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 Surgery Partners 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 Surgery Partners, you can compare the effects of market volatilities on Select Medical and Surgery Partners 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 Surgery Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and Surgery Partners.
Diversification Opportunities for Select Medical and Surgery Partners
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Select and Surgery is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and Surgery Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgery Partners 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 Surgery Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgery Partners has no effect on the direction of Select Medical i.e., Select Medical and Surgery Partners go up and down completely randomly.
Pair Corralation between Select Medical and Surgery Partners
Considering the 90-day investment horizon Select Medical Holdings is expected to generate 0.68 times more return on investment than Surgery Partners. However, Select Medical Holdings is 1.48 times less risky than Surgery Partners. It trades about 0.06 of its potential returns per unit of risk. Surgery Partners is currently generating about 0.01 per unit of risk. If you would invest 2,267 in Select Medical Holdings on August 28, 2024 and sell it today you would earn a total of 1,603 from holding Select Medical Holdings or generate 70.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Medical Holdings vs. Surgery Partners
Performance |
| Timeline |
| Select Medical Holdings |
| Surgery Partners |
Select Medical and Surgery Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Medical and Surgery Partners
The main advantage of trading using opposite Select Medical and Surgery Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, Surgery Partners 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 Surgery Partners will offset losses from the drop in Surgery Partners' long position.| Select Medical vs. The Ensign Group | Select Medical vs. Encompass Health Corp | Select Medical vs. InnovAge Holding Corp | Select Medical vs. Enhabit |
| Surgery Partners vs. Pennant Group | Surgery Partners vs. The Ensign Group | Surgery Partners vs. Encompass Health Corp | Surgery Partners vs. Healthcare Services Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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