Correlation Between Raffles Medical and Select Medical

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

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

Diversification Opportunities for Raffles Medical and Select Medical

-0.25

Correlation Coefficient

Raffles Medical  Select Medical

Very good diversification

The 3 months correlation between Raffles and Select is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Raffles Medical Group 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 Raffles 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 Raffles Medical Group 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 Raffles Medical i.e., Raffles Medical and Select Medical go up and down completely randomly.

Pair Corralation between Raffles Medical and Select Medical

If you would invest  1,894  in Select Medical Holdings on September 24, 2024 and sell it today you would earn a total of  12.00  from holding Select Medical Holdings or generate 0.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Raffles Medical Group  vs.  Select Medical Holdings

Raffles Medical Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raffles Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Raffles Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Select Medical Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Select Medical Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Select Medical is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Raffles Medical and Select Medical

The main advantage of trading using opposite Raffles Medical and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raffles Medical 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 Raffles Medical Group 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.