Correlation Between Easy Technologies and Tenaris SA

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

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

Diversification Opportunities for Easy Technologies and Tenaris SA

0.0

Correlation Coefficient

Easy Technologies  Tenaris SA

Pay attention - limited upside

The 3 months correlation between Easy and Tenaris is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Easy Technologies 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 Easy Technologies 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 Easy Technologies 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 Easy Technologies i.e., Easy Technologies and Tenaris SA go up and down completely randomly.

Pair Corralation between Easy Technologies and Tenaris SA

If you would invest  2,888  in Tenaris SA ADR on September 17, 2024 and sell it today you would earn a total of  970.00  from holding Tenaris SA ADR or generate 33.59% return on investment over 90 days.

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

Easy Technologies  vs.  Tenaris SA ADR

Easy Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Easy Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Easy Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Tenaris SA ADR

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA ADR are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Tenaris SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Easy Technologies and Tenaris SA

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

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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.