Correlation Between Tenet Healthcare and AMN Healthcare
Can any of the company-specific risk be diversified away by investing in both Tenet Healthcare and AMN 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 Tenet Healthcare and AMN Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenet Healthcare and AMN Healthcare Services, you can compare the effects of market volatilities on Tenet Healthcare and AMN 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 Tenet Healthcare with a short position of AMN Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenet Healthcare and AMN Healthcare.
Diversification Opportunities for Tenet Healthcare and AMN Healthcare
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tenet and AMN is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Healthcare and AMN Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMN Healthcare Services 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 AMN Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMN Healthcare Services has no effect on the direction of Tenet Healthcare i.e., Tenet Healthcare and AMN Healthcare go up and down completely randomly.
Pair Corralation between Tenet Healthcare and AMN Healthcare
Considering the 90-day investment horizon Tenet Healthcare is expected to generate 0.58 times more return on investment than AMN Healthcare. However, Tenet Healthcare is 1.72 times less risky than AMN Healthcare. It trades about 0.05 of its potential returns per unit of risk. AMN Healthcare Services is currently generating about -0.19 per unit of risk. If you would invest 13,949 in Tenet Healthcare on August 28, 2024 and sell it today you would earn a total of 383.00 from holding Tenet Healthcare or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenet Healthcare vs. AMN Healthcare Services
Performance |
| Timeline |
| Tenet Healthcare |
| AMN Healthcare Services |
Tenet Healthcare and AMN Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenet Healthcare and AMN Healthcare
The main advantage of trading using opposite Tenet Healthcare and AMN Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenet Healthcare position performs unexpectedly, AMN 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 AMN Healthcare will offset losses from the drop in AMN Healthcare's long position.| Tenet Healthcare vs. Acadia Healthcare | Tenet Healthcare vs. HCA Holdings | Tenet Healthcare vs. US Physicalrapy | Tenet Healthcare vs. DaVita HealthCare Partners |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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