Correlation Between Globex Mining and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both Globex Mining 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 Globex Mining and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Tenaris SA, you can compare the effects of market volatilities on Globex Mining 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 Globex Mining with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Tenaris SA.
Diversification Opportunities for Globex Mining and Tenaris SA
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globex and Tenaris is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA and Globex Mining 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 Globex Mining Enterprises 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 Globex Mining i.e., Globex Mining and Tenaris SA go up and down completely randomly.
Pair Corralation between Globex Mining and Tenaris SA
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 2.04 times more return on investment than Tenaris SA. However, Globex Mining is 2.04 times more volatile than Tenaris SA. It trades about 0.43 of its potential returns per unit of risk. Tenaris SA is currently generating about 0.25 per unit of risk. If you would invest 77.00 in Globex Mining Enterprises on October 25, 2024 and sell it today you would earn a total of 11.00 from holding Globex Mining Enterprises or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Tenaris SA
Performance |
| Timeline |
| Globex Mining Enterprises |
| Tenaris SA |
Globex Mining and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Tenaris SA
The main advantage of trading using opposite Globex Mining and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining 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.| Globex Mining vs. UPDATE SOFTWARE | Globex Mining vs. Applied Materials | Globex Mining vs. Micron Technology | Globex Mining vs. Mitsubishi Materials |
| Tenaris SA vs. Easy Software AG | Tenaris SA vs. PennantPark Investment | Tenaris SA vs. Check Point Software | Tenaris SA vs. SEI INVESTMENTS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |