Correlation Between YAOKO CO and Tenaris SA

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

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

Diversification Opportunities for YAOKO CO and Tenaris SA

-0.15

Correlation Coefficient

YAOKO CO  Tenaris SA

Good diversification

The 3 months correlation between YAOKO and Tenaris is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding YAOKO LTD and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA and YAOKO CO 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 YAOKO LTD are associated (or correlated) with Tenaris SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaris SA has no effect on the direction of YAOKO CO i.e., YAOKO CO and Tenaris SA go up and down completely randomly.

Pair Corralation between YAOKO CO and Tenaris SA

Assuming the 90 days horizon YAOKO CO is expected to generate 1.52 times less return on investment than Tenaris SA. But when comparing it to its historical volatility, YAOKO LTD is 1.45 times less risky than Tenaris SA. It trades about 0.02 of its potential returns per unit of risk. Tenaris SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,600  in Tenaris SA on December 29, 2024 and sell it today you would earn a total of  40.00  from holding Tenaris SA or generate 1.11% return on investment over 90 days.

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

YAOKO LTD  vs.  Tenaris SA

YAOKO LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YAOKO LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, YAOKO CO is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Tenaris SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tenaris SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with YAOKO CO and Tenaris SA

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

The idea behind YAOKO LTD and Tenaris SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.