Correlation Between Tenet Healthcare and BankInvest Virksomhedsoblig

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

By analyzing existing cross correlation between Tenet Healthcare and BankInvest Virksomhedsobligationer, you can compare the effects of market volatilities on Tenet Healthcare and BankInvest Virksomhedsoblig 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 Tenet Healthcare with a short position of BankInvest Virksomhedsoblig. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenet Healthcare and BankInvest Virksomhedsoblig.

Diversification Opportunities for Tenet Healthcare and BankInvest Virksomhedsoblig

0.54

Correlation Coefficient

Tenet Healthcare  BankInvest Virksomhedsoblig

Very weak diversification

The 3 months correlation between Tenet and BankInvest is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Healthcare and BankInvest Virksomhedsobliga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Virksomhedsoblig and Tenet Healthcare 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 Tenet Healthcare are associated (or correlated) with BankInvest Virksomhedsoblig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Virksomhedsoblig has no effect on the direction of Tenet Healthcare i.e., Tenet Healthcare and BankInvest Virksomhedsoblig go up and down completely randomly.

Pair Corralation between Tenet Healthcare and BankInvest Virksomhedsoblig

Considering the 90-day investment horizon Tenet Healthcare is expected to under-perform the BankInvest Virksomhedsoblig. In addition to that, Tenet Healthcare is 5.62 times more volatile than BankInvest Virksomhedsobligationer. It trades about -0.11 of its total potential returns per unit of risk. BankInvest Virksomhedsobligationer is currently generating about -0.04 per unit of volatility. If you would invest  14,095  in BankInvest Virksomhedsobligationer on January 25, 2024 and sell it today you would lose (35.00) from holding BankInvest Virksomhedsobligationer or give up 0.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	81.82%
Values	Daily Returns

Tenet Healthcare  vs.  BankInvest Virksomhedsobliga

Tenet Healthcare

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tenet Healthcare are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Tenet Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

BankInvest Virksomhedsoblig

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Virksomhedsobligationer are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, BankInvest Virksomhedsoblig is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tenet Healthcare and BankInvest Virksomhedsoblig

The main advantage of trading using opposite Tenet Healthcare and BankInvest Virksomhedsoblig positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenet Healthcare position performs unexpectedly, BankInvest Virksomhedsoblig 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 BankInvest Virksomhedsoblig will offset losses from the drop in BankInvest Virksomhedsoblig's long position.

The idea behind Tenet Healthcare and BankInvest Virksomhedsobligationer 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.