Correlation Between Select Medical and WellCare Health
Can any of the company-specific risk be diversified away by investing in both Select Medical and WellCare 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 WellCare 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 WellCare Health Plans, you can compare the effects of market volatilities on Select Medical and WellCare 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 WellCare Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and WellCare Health.
Diversification Opportunities for Select Medical and WellCare Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Select and WellCare is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and WellCare Health Plans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WellCare Health Plans 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 WellCare Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WellCare Health Plans has no effect on the direction of Select Medical i.e., Select Medical and WellCare Health go up and down completely randomly.
Pair Corralation between Select Medical and WellCare Health
If you would invest 2,582 in Select Medical Holdings on January 17, 2024 and sell it today you would earn a total of 177.00 from holding Select Medical Holdings or generate 6.86% 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. WellCare Health Plans
Performance |
| Timeline |
| Select Medical Holdings |
| WellCare Health Plans |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Select Medical and WellCare Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Medical and WellCare Health
The main advantage of trading using opposite Select Medical and WellCare Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, WellCare 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 WellCare Health will offset losses from the drop in WellCare 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 |
| WellCare Health vs. Boyd Gaming | WellCare Health vs. Welsbach Technology Metals | WellCare Health vs. US GoldMining Common | WellCare Health vs. Sandstorm Gold Ltd |
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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