Correlation Between AGL Energy and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both AGL Energy 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 AGL Energy and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGL Energy Limited and Tenaris SA ADR, you can compare the effects of market volatilities on AGL Energy 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 AGL Energy with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGL Energy and Tenaris SA.
Diversification Opportunities for AGL Energy and Tenaris SA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGL and Tenaris is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AGL Energy Limited 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 AGL Energy 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 AGL Energy Limited 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 AGL Energy i.e., AGL Energy and Tenaris SA go up and down completely randomly.
Pair Corralation between AGL Energy and Tenaris SA
If you would invest 3,255 in Tenaris SA ADR on September 4, 2024 and sell it today you would earn a total of 593.00 from holding Tenaris SA ADR or generate 18.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
AGL Energy Limited vs. Tenaris SA ADR
Performance |
| Timeline |
| AGL Energy Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tenaris SA ADR |
AGL Energy and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGL Energy and Tenaris SA
The main advantage of trading using opposite AGL Energy and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGL Energy 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.| AGL Energy vs. Tenaris SA ADR | AGL Energy vs. Precision Drilling | AGL Energy vs. Transocean | AGL Energy vs. Small Cap Premium |
| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |