Correlation Between Astrana Health and Select Medical

Can any of the company-specific risk be diversified away by investing in both Astrana 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 Astrana 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 Astrana Health and Select Medical Holdings, you can compare the effects of market volatilities on Astrana 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 Astrana Health with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astrana Health and Select Medical.

Diversification Opportunities for Astrana Health and Select Medical

0.09

Correlation Coefficient

Astrana Health  Select Medical

Significant diversification

The 3 months correlation between Astrana and Select is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Astrana Health 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 Astrana 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 Astrana Health 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 Astrana Health i.e., Astrana Health and Select Medical go up and down completely randomly.

Pair Corralation between Astrana Health and Select Medical

If you would invest  1,888  in Select Medical Holdings on September 2, 2024 and sell it today you would earn a total of  223.00  from holding Select Medical Holdings or generate 11.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Astrana Health  vs.  Select Medical Holdings

Astrana Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astrana Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Astrana Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Select Medical Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Select Medical Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Select Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astrana Health and Select Medical

The main advantage of trading using opposite Astrana Health and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astrana 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.

The idea behind Astrana Health and Select Medical Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.