Correlation Between LifePoint Health and Tenet Healthcare
Can any of the company-specific risk be diversified away by investing in both LifePoint Health and Tenet Healthcare 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 LifePoint Health and Tenet Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LifePoint Health and Tenet Healthcare, you can compare the effects of market volatilities on LifePoint Health and Tenet Healthcare 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 LifePoint Health with a short position of Tenet Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifePoint Health and Tenet Healthcare.
Diversification Opportunities for LifePoint Health and Tenet Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LifePoint and Tenet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LifePoint Health and Tenet Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenet Healthcare and LifePoint 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 LifePoint Health are associated (or correlated) with Tenet Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenet Healthcare has no effect on the direction of LifePoint Health i.e., LifePoint Health and Tenet Healthcare go up and down completely randomly.
Pair Corralation between LifePoint Health and Tenet Healthcare
If you would invest 10,071 in Tenet Healthcare on February 4, 2024 and sell it today you would earn a total of 1,957 from holding Tenet Healthcare or generate 19.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LifePoint Health vs. Tenet Healthcare
Performance |
| Timeline |
| LifePoint Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tenet Healthcare |
LifePoint Health and Tenet Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifePoint Health and Tenet Healthcare
The main advantage of trading using opposite LifePoint Health and Tenet Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifePoint Health position performs unexpectedly, Tenet Healthcare 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 Tenet Healthcare will offset losses from the drop in Tenet Healthcare's long position.| LifePoint Health vs. BRP Inc | LifePoint Health vs. Visteon Corp | LifePoint Health vs. Lucid Group | LifePoint Health vs. PACCAR Inc |
| Tenet Healthcare vs. Acadia Healthcare | Tenet Healthcare vs. HCA Holdings | Tenet Healthcare vs. US Physicalrapy | Tenet Healthcare vs. DaVita HealthCare Partners |
Check out your portfolio center.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.
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