Correlation Between InnovAge Holding and Select Medical

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

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

Diversification Opportunities for InnovAge Holding and Select Medical

-0.22

Correlation Coefficient

InnovAge Holding  Select Medical

Very good diversification

The 3 months correlation between InnovAge and Select is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding InnovAge Holding Corp 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 InnovAge Holding 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 InnovAge Holding Corp 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 InnovAge Holding i.e., InnovAge Holding and Select Medical go up and down completely randomly.

Pair Corralation between InnovAge Holding and Select Medical

Given the investment horizon of 90 days InnovAge Holding Corp is expected to generate 1.61 times more return on investment than Select Medical. However, InnovAge Holding is 1.61 times more volatile than Select Medical Holdings. It trades about 0.05 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  289.00  in InnovAge Holding Corp on May 5, 2025 and sell it today you would earn a total of  24.00  from holding InnovAge Holding Corp or generate 8.3% return on investment over 90 days.

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

InnovAge Holding Corp  vs.  Select Medical Holdings

InnovAge Holding Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InnovAge Holding Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, InnovAge Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Select Medical Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Select Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with InnovAge Holding and Select Medical

The main advantage of trading using opposite InnovAge Holding and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnovAge Holding 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 InnovAge Holding Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.