Correlation Between Weibo Corp and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both Weibo Corp 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 Weibo Corp and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Tenaris SA ADR, you can compare the effects of market volatilities on Weibo Corp 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 Weibo Corp with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Tenaris SA.
Diversification Opportunities for Weibo Corp and Tenaris SA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weibo and Tenaris is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp 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 Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and Tenaris SA go up and down completely randomly.
Pair Corralation between Weibo Corp and Tenaris SA
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.2 times less return on investment than Tenaris SA. In addition to that, Weibo Corp is 1.71 times more volatile than Tenaris SA ADR. It trades about 0.03 of its total potential returns per unit of risk. Tenaris SA ADR is currently generating about 0.07 per unit of volatility. If you would invest 3,789 in Tenaris SA ADR on December 26, 2024 and sell it today you would earn a total of 239.00 from holding Tenaris SA ADR or generate 6.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Weibo Corp vs. Tenaris SA ADR
Performance |
Timeline |
Weibo Corp |
Tenaris SA ADR |
Weibo Corp and Tenaris SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weibo Corp and Tenaris SA
The main advantage of trading using opposite Weibo Corp and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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.Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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