Correlation Between WellCare Health and Select Medical
Can any of the company-specific risk be diversified away by investing in both WellCare Health and Select Medical 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 WellCare Health and Select Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WellCare Health Plans and Select Medical Holdings, you can compare the effects of market volatilities on WellCare Health and Select Medical 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 WellCare Health with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of WellCare Health and Select Medical.
Diversification Opportunities for WellCare Health and Select Medical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WellCare and Select is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WellCare Health Plans and Select Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Medical Holdings and WellCare Health 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 WellCare Health Plans are associated (or correlated) with Select Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Medical Holdings has no effect on the direction of WellCare Health i.e., WellCare Health and Select Medical go up and down completely randomly.
Pair Corralation between WellCare Health and Select Medical
If you would invest (100.00) in WellCare Health Plans on January 25, 2024 and sell it today you would earn a total of 100.00 from holding WellCare Health Plans or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
WellCare Health Plans vs. Select Medical Holdings
Performance |
| Timeline |
| WellCare Health Plans |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Select Medical Holdings |
WellCare Health and Select Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WellCare Health and Select Medical
The main advantage of trading using opposite WellCare Health and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WellCare Health position performs unexpectedly, Select Medical 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 Select Medical will offset losses from the drop in Select Medical's long position.| WellCare Health vs. NETGEAR | WellCare Health vs. Getty Copper | WellCare Health vs. Harmony Gold Mining | WellCare Health vs. Kandi Technologies Group |
| Select Medical vs. The Ensign Group | Select Medical vs. Encompass Health Corp | Select Medical vs. InnovAge Holding Corp | Select Medical vs. Enhabit |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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