Correlation Between Select Medical and Advanced Accelerator

Can any of the company-specific risk be diversified away by investing in both Select Medical and Advanced Accelerator 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 Advanced Accelerator 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 Advanced Accelerator Applications, you can compare the effects of market volatilities on Select Medical and Advanced Accelerator 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 Advanced Accelerator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Medical and Advanced Accelerator.

Diversification Opportunities for Select Medical and Advanced Accelerator

0.0

Correlation Coefficient

Select Medical  Advanced Accelerator

Pay attention - limited upside

The 3 months correlation between Select and Advanced is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Select Medical Holdings and Advanced Accelerator Applicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Accelerator 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 Advanced Accelerator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Accelerator has no effect on the direction of Select Medical i.e., Select Medical and Advanced Accelerator go up and down completely randomly.

Pair Corralation between Select Medical and Advanced Accelerator

If you would invest  2,170  in Select Medical Holdings on January 25, 2024 and sell it today you would earn a total of  647.00  from holding Select Medical Holdings or generate 29.82% 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.  Advanced Accelerator Applicati

Select Medical Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Select Medical Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Select Medical may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Advanced Accelerator

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Accelerator Applications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Advanced Accelerator is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Select Medical and Advanced Accelerator

The main advantage of trading using opposite Select Medical and Advanced Accelerator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Medical position performs unexpectedly, Advanced Accelerator 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 Advanced Accelerator will offset losses from the drop in Advanced Accelerator's long position.

The idea behind Select Medical Holdings and Advanced Accelerator Applications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.