Correlation Between Tenet Healthcare and Agilon Health

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

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

Diversification Opportunities for Tenet Healthcare and Agilon Health

0.12

Correlation Coefficient

Tenet Healthcare  Agilon Health

Average diversification

The 3 months correlation between Tenet and Agilon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Healthcare and agilon health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on agilon health 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 Agilon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of agilon health has no effect on the direction of Tenet Healthcare i.e., Tenet Healthcare and Agilon Health go up and down completely randomly.

Pair Corralation between Tenet Healthcare and Agilon Health

Considering the 90-day investment horizon Tenet Healthcare is expected to generate 10.84 times less return on investment than Agilon Health. But when comparing it to its historical volatility, Tenet Healthcare is 1.97 times less risky than Agilon Health. It trades about 0.06 of its potential returns per unit of risk. agilon health is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  191.00  in agilon health on December 28, 2024 and sell it today you would earn a total of  270.00  from holding agilon health or generate 141.36% return on investment over 90 days.

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

Tenet Healthcare  vs.  agilon health

Tenet Healthcare

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenet Healthcare are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Tenet Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.

agilon health

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in agilon health are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Agilon Health disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tenet Healthcare and Agilon Health

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

The idea behind Tenet Healthcare and agilon health 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.