Correlation Between Doximity and Select Medical

Can any of the company-specific risk be diversified away by investing in both Doximity 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 Doximity and Select Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Doximity and Select Medical Holdings, you can compare the effects of market volatilities on Doximity 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 Doximity with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doximity and Select Medical.

Diversification Opportunities for Doximity and Select Medical

0.66

Correlation Coefficient

Doximity  Select Medical

Poor diversification

The 3 months correlation between Doximity and Select is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Doximity 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 Doximity 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 Doximity 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 Doximity i.e., Doximity and Select Medical go up and down completely randomly.

Pair Corralation between Doximity and Select Medical

Given the investment horizon of 90 days Doximity is expected to generate 2.14 times more return on investment than Select Medical. However, Doximity is 2.14 times more volatile than Select Medical Holdings. It trades about 0.14 of its potential returns per unit of risk. Select Medical Holdings is currently generating about 0.09 per unit of risk. If you would invest  3,590  in Doximity on September 2, 2024 and sell it today you would earn a total of  1,710  from holding Doximity or generate 47.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Doximity  vs.  Select Medical Holdings

Doximity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Doximity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Doximity unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Doximity and Select Medical

The main advantage of trading using opposite Doximity and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doximity 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 Doximity 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.