Correlation Between Select Medical and LifePoint Health
Can any of the company-specific risk be diversified away by investing in both Select Medical and LifePoint Health 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 LifePoint Health 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 LifePoint Health, you can compare the effects of market volatilities on Select Medical and LifePoint Health 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 LifePoint Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and LifePoint Health.
Diversification Opportunities for Select Medical and LifePoint Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Select and LifePoint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and LifePoint Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifePoint Health 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 LifePoint Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifePoint Health has no effect on the direction of Select Medical i.e., Select Medical and LifePoint Health go up and down completely randomly.
Pair Corralation between Select Medical and LifePoint Health
If you would invest 2,228 in Select Medical Holdings on January 24, 2024 and sell it today you would earn a total of 505.00 from holding Select Medical Holdings or generate 22.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Select Medical Holdings vs. LifePoint Health
Performance |
Timeline |
Select Medical Holdings |
LifePoint Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Select Medical and LifePoint Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Select Medical and LifePoint Health
The main advantage of trading using opposite Select Medical and LifePoint Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, LifePoint Health 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 LifePoint Health will offset losses from the drop in LifePoint Health'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 |
LifePoint Health vs. Cementos Pacasmayo SAA | LifePoint Health vs. Barrick Gold Corp | LifePoint Health vs. ZK International Group | LifePoint Health vs. Meli Hotels International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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