Correlation Between Tenet Healthcare and Enhabit
Can any of the company-specific risk be diversified away by investing in both Tenet Healthcare and Enhabit 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 Enhabit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenet Healthcare and Enhabit, you can compare the effects of market volatilities on Tenet Healthcare and Enhabit 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 Enhabit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenet Healthcare and Enhabit.
Diversification Opportunities for Tenet Healthcare and Enhabit
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tenet and Enhabit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Healthcare and Enhabit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhabit 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 Enhabit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhabit has no effect on the direction of Tenet Healthcare i.e., Tenet Healthcare and Enhabit go up and down completely randomly.
Pair Corralation between Tenet Healthcare and Enhabit
Considering the 90-day investment horizon Tenet Healthcare is expected to generate 1.67 times less return on investment than Enhabit. In addition to that, Tenet Healthcare is 1.72 times more volatile than Enhabit. It trades about 0.05 of its total potential returns per unit of risk. Enhabit is currently generating about 0.14 per unit of volatility. If you would invest 713.00 in Enhabit on August 28, 2024 and sell it today you would earn a total of 49.00 from holding Enhabit or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tenet Healthcare vs. Enhabit
Performance |
| Timeline |
| Tenet Healthcare |
| Enhabit |
Tenet Healthcare and Enhabit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenet Healthcare and Enhabit
The main advantage of trading using opposite Tenet Healthcare and Enhabit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenet Healthcare position performs unexpectedly, Enhabit 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 Enhabit will offset losses from the drop in Enhabit's long position.| Tenet Healthcare vs. Acadia Healthcare | Tenet Healthcare vs. HCA Holdings | Tenet Healthcare vs. US Physicalrapy | Tenet Healthcare vs. DaVita HealthCare Partners |
| Enhabit vs. The Ensign Group | Enhabit vs. Pennant Group | Enhabit vs. InnovAge Holding Corp | Enhabit vs. National HealthCare |
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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