Correlation Between Kontoor Brands and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Tenaris SA ADR, you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Tenaris SA.
Diversification Opportunities for Kontoor Brands and Tenaris SA
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kontoor and Tenaris is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Tenaris SA go up and down completely randomly.
Pair Corralation between Kontoor Brands and Tenaris SA
Considering the 90-day investment horizon Kontoor Brands is expected to generate 2.33 times less return on investment than Tenaris SA. In addition to that, Kontoor Brands is 1.02 times more volatile than Tenaris SA ADR. It trades about 0.17 of its total potential returns per unit of risk. Tenaris SA ADR is currently generating about 0.4 per unit of volatility. If you would invest 3,241 in Tenaris SA ADR on September 1, 2024 and sell it today you would earn a total of 592.00 from holding Tenaris SA ADR or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Tenaris SA ADR
Performance |
| Timeline |
| Kontoor Brands |
| Tenaris SA ADR |
Kontoor Brands and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Tenaris SA
The main advantage of trading using opposite Kontoor Brands and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.| Kontoor Brands vs. VF Corporation | Kontoor Brands vs. Levi Strauss Co | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Oxford Industries |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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