Correlation Between Tenaris SA and 22822VAZ4

Can any of the company-specific risk be diversified away by investing in both Tenaris SA and 22822VAZ4 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 22822VAZ4 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 CCI 29 15 MAR 27, you can compare the effects of market volatilities on Tenaris SA and 22822VAZ4 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 22822VAZ4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and 22822VAZ4.

Diversification Opportunities for Tenaris SA and 22822VAZ4

0.07

Correlation Coefficient

Tenaris SA  22822VAZ4

Significant diversification

The 3 months correlation between Tenaris and 22822VAZ4 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and CCI 29 15 MAR 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCI 29 15 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 22822VAZ4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCI 29 15 has no effect on the direction of Tenaris SA i.e., Tenaris SA and 22822VAZ4 go up and down completely randomly.

Pair Corralation between Tenaris SA and 22822VAZ4

Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 1.43 times more return on investment than 22822VAZ4. However, Tenaris SA is 1.43 times more volatile than CCI 29 15 MAR 27. It trades about 0.06 of its potential returns per unit of risk. CCI 29 15 MAR 27 is currently generating about -0.03 per unit of risk. If you would invest  3,789  in Tenaris SA ADR on December 25, 2024 and sell it today you would earn a total of  174.00  from holding Tenaris SA ADR or generate 4.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.22%
Values	Daily Returns

Tenaris SA ADR  vs.  CCI 29 15 MAR 27

Tenaris SA ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Tenaris SA is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

CCI 29 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCI 29 15 MAR 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 22822VAZ4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tenaris SA and 22822VAZ4

The main advantage of trading using opposite Tenaris SA and 22822VAZ4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, 22822VAZ4 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 22822VAZ4 will offset losses from the drop in 22822VAZ4's long position.

The idea behind Tenaris SA ADR and CCI 29 15 MAR 27 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.