Correlation Between Tenet Fintech and ESE Entertainment

Can any of the company-specific risk be diversified away by investing in both Tenet Fintech and ESE Entertainment 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 ESE Entertainment 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 ESE Entertainment, you can compare the effects of market volatilities on Tenet Fintech and ESE Entertainment 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 ESE Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenet Fintech and ESE Entertainment.

Diversification Opportunities for Tenet Fintech and ESE Entertainment

-0.37

Correlation Coefficient

Tenet Fintech  ESE Entertainment

Very good diversification

The 3 months correlation between Tenet and ESE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Fintech Group and ESE Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESE Entertainment 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 ESE Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESE Entertainment has no effect on the direction of Tenet Fintech i.e., Tenet Fintech and ESE Entertainment go up and down completely randomly.

Pair Corralation between Tenet Fintech and ESE Entertainment

Assuming the 90 days horizon Tenet Fintech Group is expected to generate 1.71 times more return on investment than ESE Entertainment. However, Tenet Fintech is 1.71 times more volatile than ESE Entertainment. It trades about 0.03 of its potential returns per unit of risk. ESE Entertainment is currently generating about -0.14 per unit of risk. If you would invest  5.60  in Tenet Fintech Group on September 25, 2024 and sell it today you would lose (0.80) from holding Tenet Fintech Group or give up 14.29% of portfolio value over 90 days.

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

Tenet Fintech Group  vs.  ESE Entertainment

Tenet Fintech Group

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenet Fintech Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Tenet Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

ESE Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Tenet Fintech and ESE Entertainment

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

The idea behind Tenet Fintech Group and ESE Entertainment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.