Correlation Between Tenable Holdings and Amdocs

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

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

Diversification Opportunities for Tenable Holdings and Amdocs

0.44

Correlation Coefficient

Tenable Holdings  Amdocs

Very weak diversification

The 3 months correlation between Tenable and Amdocs is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tenable Holdings and Amdocs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amdocs and Tenable Holdings 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 Tenable Holdings are associated (or correlated) with Amdocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amdocs has no effect on the direction of Tenable Holdings i.e., Tenable Holdings and Amdocs go up and down completely randomly.

Pair Corralation between Tenable Holdings and Amdocs

Given the investment horizon of 90 days Tenable Holdings is expected to generate 1.48 times more return on investment than Amdocs. However, Tenable Holdings is 1.48 times more volatile than Amdocs. It trades about 0.06 of its potential returns per unit of risk. Amdocs is currently generating about 0.02 per unit of risk. If you would invest  3,989  in Tenable Holdings on September 4, 2024 and sell it today you would earn a total of  217.00  from holding Tenable Holdings or generate 5.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tenable Holdings  vs.  Amdocs

Tenable Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenable Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tenable Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Amdocs

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amdocs are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Amdocs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tenable Holdings and Amdocs

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

The idea behind Tenable Holdings and Amdocs 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.