Correlation Between Mizuno and Tenaris SA

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

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

Diversification Opportunities for Mizuno and Tenaris SA

0.14

Correlation Coefficient

Mizuno  Tenaris SA

Average diversification

The 3 months correlation between Mizuno and Tenaris is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mizuno and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA and Mizuno 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 Mizuno 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 Mizuno i.e., Mizuno and Tenaris SA go up and down completely randomly.

Pair Corralation between Mizuno and Tenaris SA

Assuming the 90 days horizon Mizuno is expected to generate 15.84 times more return on investment than Tenaris SA. However, Mizuno is 15.84 times more volatile than Tenaris SA. It trades about 0.12 of its potential returns per unit of risk. Tenaris SA is currently generating about 0.02 per unit of risk. If you would invest  1,724  in Mizuno on December 30, 2024 and sell it today you would earn a total of  3,256  from holding Mizuno or generate 188.86% return on investment over 90 days.

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

Mizuno  vs.  Tenaris SA

Mizuno

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mizuno are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Mizuno reported solid returns over the last few months and may actually be approaching a breakup point.

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mizuno and Tenaris SA

The main advantage of trading using opposite Mizuno and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuno 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 Mizuno 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..