Correlation Between FUYO GENERAL and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and Tenaris SA, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Tenaris SA.
Diversification Opportunities for FUYO GENERAL and Tenaris SA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FUYO and Tenaris is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA and FUYO GENERAL 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 FUYO GENERAL LEASE 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 has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Tenaris SA go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Tenaris SA
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.97 times more return on investment than Tenaris SA. However, FUYO GENERAL LEASE is 1.03 times less risky than Tenaris SA. It trades about 0.22 of its potential returns per unit of risk. Tenaris SA is currently generating about -0.03 per unit of risk. If you would invest 6,950 in FUYO GENERAL LEASE on October 9, 2024 and sell it today you would earn a total of 250.00 from holding FUYO GENERAL LEASE or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Tenaris SA
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Tenaris SA |
FUYO GENERAL and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Tenaris SA
The main advantage of trading using opposite FUYO GENERAL and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. Spirent Communications plc | FUYO GENERAL vs. CITIC Telecom International | FUYO GENERAL vs. Ross Stores | FUYO GENERAL vs. BURLINGTON STORES |
| Tenaris SA vs. Wyndham Hotels Resorts | Tenaris SA vs. Pebblebrook Hotel Trust | Tenaris SA vs. De Grey Mining | Tenaris SA vs. Globex Mining Enterprises |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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