Correlation Between Tenet Healthcare and ASGN

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

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

Diversification Opportunities for Tenet Healthcare and ASGN

0.57

Correlation Coefficient

Tenet Healthcare  ASGN

Very weak diversification

The 3 months correlation between Tenet and ASGN is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Healthcare and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc 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 ASGN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Inc has no effect on the direction of Tenet Healthcare i.e., Tenet Healthcare and ASGN go up and down completely randomly.

Pair Corralation between Tenet Healthcare and ASGN

Considering the 90-day investment horizon Tenet Healthcare is expected to generate 1.24 times more return on investment than ASGN. However, Tenet Healthcare is 1.24 times more volatile than ASGN Inc. It trades about 0.1 of its potential returns per unit of risk. ASGN Inc is currently generating about 0.02 per unit of risk. If you would invest  4,676  in Tenet Healthcare on September 18, 2024 and sell it today you would earn a total of  8,701  from holding Tenet Healthcare or generate 186.08% return on investment over 90 days.

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

Tenet Healthcare  vs.  ASGN Inc

Tenet Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tenet Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ASGN Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASGN Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, ASGN is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tenet Healthcare and ASGN

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

The idea behind Tenet Healthcare and ASGN Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.