Correlation Between Tenaris SA and Dolphin Entertainment

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

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

Diversification Opportunities for Tenaris SA and Dolphin Entertainment

-0.71

Correlation Coefficient

Tenaris SA  Dolphin Entertainment

Pay attention - limited upside

The 3 months correlation between Tenaris and Dolphin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment 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 ADR are associated (or correlated) with Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Tenaris SA i.e., Tenaris SA and Dolphin Entertainment go up and down completely randomly.

Pair Corralation between Tenaris SA and Dolphin Entertainment

Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.34 times more return on investment than Dolphin Entertainment. However, Tenaris SA ADR is 2.98 times less risky than Dolphin Entertainment. It trades about 0.17 of its potential returns per unit of risk. Dolphin Entertainment is currently generating about 0.02 per unit of risk. 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

Tenaris SA ADR  vs.  Dolphin Entertainment

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.

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.

Pair Trading with Tenaris SA and Dolphin Entertainment

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

The idea behind Tenaris SA ADR and Dolphin Entertainment 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.