Correlation Between Tenet Healthcare and Handelsinvest Nordamerika

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

By analyzing existing cross correlation between Tenet Healthcare and Handelsinvest Nordamerika, you can compare the effects of market volatilities on Tenet Healthcare and Handelsinvest Nordamerika 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 Handelsinvest Nordamerika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenet Healthcare and Handelsinvest Nordamerika.

Diversification Opportunities for Tenet Healthcare and Handelsinvest Nordamerika

-0.1

Correlation Coefficient

Tenet Healthcare  Handelsinvest Nordamerika

Good diversification

The 3 months correlation between Tenet and Handelsinvest is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Healthcare and Handelsinvest Nordamerika in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handelsinvest Nordamerika 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 Handelsinvest Nordamerika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handelsinvest Nordamerika has no effect on the direction of Tenet Healthcare i.e., Tenet Healthcare and Handelsinvest Nordamerika go up and down completely randomly.

Pair Corralation between Tenet Healthcare and Handelsinvest Nordamerika

Considering the 90-day investment horizon Tenet Healthcare is expected to under-perform the Handelsinvest Nordamerika. In addition to that, Tenet Healthcare is 1.35 times more volatile than Handelsinvest Nordamerika. It trades about -0.16 of its total potential returns per unit of risk. Handelsinvest Nordamerika is currently generating about -0.07 per unit of volatility. If you would invest  24,270  in Handelsinvest Nordamerika on January 18, 2024 and sell it today you would lose (350.00) from holding Handelsinvest Nordamerika or give up 1.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Tenet Healthcare  vs.  Handelsinvest Nordamerika

Tenet Healthcare

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tenet Healthcare are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Tenet Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Handelsinvest Nordamerika

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Handelsinvest Nordamerika has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Handelsinvest Nordamerika is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tenet Healthcare and Handelsinvest Nordamerika

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

The idea behind Tenet Healthcare and Handelsinvest Nordamerika 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.