Correlation Between Tenaris SA and Texas Gulf
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Texas Gulf 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 Tenaris SA and Texas Gulf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaris SA and Texas Gulf Energy, you can compare the effects of market volatilities on Tenaris SA and Texas Gulf 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 Tenaris SA with a short position of Texas Gulf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Texas Gulf.
Diversification Opportunities for Tenaris SA and Texas Gulf
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tenaris and Texas is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA and Texas Gulf Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Gulf Energy and Tenaris SA 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 Tenaris SA are associated (or correlated) with Texas Gulf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Gulf Energy has no effect on the direction of Tenaris SA i.e., Tenaris SA and Texas Gulf go up and down completely randomly.
Pair Corralation between Tenaris SA and Texas Gulf
Assuming the 90 days horizon Tenaris SA is expected to generate 0.97 times more return on investment than Texas Gulf. However, Tenaris SA is 1.03 times less risky than Texas Gulf. It trades about 0.11 of its potential returns per unit of risk. Texas Gulf Energy is currently generating about 0.07 per unit of risk. If you would invest 1,488 in Tenaris SA on September 26, 2024 and sell it today you would earn a total of 393.00 from holding Tenaris SA or generate 26.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.64% |
Values | Daily Returns |
Tenaris SA vs. Texas Gulf Energy
Performance |
Timeline |
Tenaris SA |
Texas Gulf Energy |
Tenaris SA and Texas Gulf Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tenaris SA and Texas Gulf
The main advantage of trading using opposite Tenaris SA and Texas Gulf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Texas Gulf 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 Texas Gulf will offset losses from the drop in Texas Gulf's long position.Tenaris SA vs. Geospace Technologies | Tenaris SA vs. MRC Global | Tenaris SA vs. Oil States International | Tenaris SA vs. Natural Gas Services |
Texas Gulf vs. SMG Industries | Texas Gulf vs. NXT Energy Solutions | Texas Gulf vs. Dawson Geophysical | Texas Gulf vs. Calfrac Well Services |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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