Correlation Between ChampionX and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both ChampionX 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 ChampionX and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Tenaris SA ADR, you can compare the effects of market volatilities on ChampionX 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 ChampionX with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Tenaris SA.
Diversification Opportunities for ChampionX and Tenaris SA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ChampionX and Tenaris is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX 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 ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Tenaris SA go up and down completely randomly.
Pair Corralation between ChampionX and Tenaris SA
Considering the 90-day investment horizon ChampionX is expected to generate 2.45 times more return on investment than Tenaris SA. However, ChampionX is 2.45 times more volatile than Tenaris SA ADR. It trades about 0.54 of its potential returns per unit of risk. Tenaris SA ADR is currently generating about 0.32 per unit of risk. If you would invest 2,584 in ChampionX on October 20, 2024 and sell it today you would earn a total of 537.00 from holding ChampionX or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Tenaris SA ADR
Performance |
| Timeline |
| ChampionX |
| Tenaris SA ADR |
ChampionX and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Tenaris SA
The main advantage of trading using opposite ChampionX and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX 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.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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