Correlation Between Dolphin Entertainment and Tenaris SA

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

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

Diversification Opportunities for Dolphin Entertainment and Tenaris SA

-0.71

Correlation Coefficient

Dolphin Entertainment  Tenaris SA

Pay attention - limited upside

The 3 months correlation between Dolphin and Tenaris is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Tenaris SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA ADR and Dolphin Entertainment 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 Dolphin Entertainment 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 ADR has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and Tenaris SA go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Tenaris SA

Given the investment horizon of 90 days Dolphin Entertainment is expected to generate 3.67 times less return on investment than Tenaris SA. In addition to that, Dolphin Entertainment is 2.98 times more volatile than Tenaris SA ADR. It trades about 0.02 of its total potential returns per unit of risk. Tenaris SA ADR is currently generating about 0.17 per unit of volatility. If you would invest  3,183  in Tenaris SA ADR on October 1, 2024 and sell it today you would earn a total of  587.00  from holding Tenaris SA ADR or generate 18.44% return on investment over 90 days.

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

Dolphin Entertainment  vs.  Tenaris SA ADR

Dolphin Entertainment

Risk-Adjusted Performance

1 of 100

Weak

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

Tenaris SA ADR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA ADR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Tenaris SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dolphin Entertainment and Tenaris SA

The main advantage of trading using opposite Dolphin Entertainment and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment 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 Dolphin Entertainment and Tenaris SA ADR 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.