Correlation Between Tenet Fintech and Cemtrex

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

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

Diversification Opportunities for Tenet Fintech and Cemtrex

0.82

Correlation Coefficient

Tenet Fintech  Cemtrex

Very poor diversification

The 3 months correlation between Tenet and Cemtrex is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Fintech Group and Cemtrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemtrex and Tenet Fintech 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 Fintech Group are associated (or correlated) with Cemtrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemtrex has no effect on the direction of Tenet Fintech i.e., Tenet Fintech and Cemtrex go up and down completely randomly.

Pair Corralation between Tenet Fintech and Cemtrex

Assuming the 90 days horizon Tenet Fintech Group is expected to generate 2.1 times more return on investment than Cemtrex. However, Tenet Fintech is 2.1 times more volatile than Cemtrex. It trades about -0.1 of its potential returns per unit of risk. Cemtrex is currently generating about -0.2 per unit of risk. If you would invest  4.40  in Tenet Fintech Group on December 29, 2024 and sell it today you would lose (2.60) from holding Tenet Fintech Group or give up 59.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Tenet Fintech Group  vs.  Cemtrex

Tenet Fintech Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tenet Fintech Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Cemtrex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cemtrex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tenet Fintech and Cemtrex

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

The idea behind Tenet Fintech Group and Cemtrex 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.