Correlation Between STORE ELECTRONIC and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC 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 STORE ELECTRONIC and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and Tenaris SA, you can compare the effects of market volatilities on STORE ELECTRONIC 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 STORE ELECTRONIC with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and Tenaris SA.
Diversification Opportunities for STORE ELECTRONIC and Tenaris SA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STORE and Tenaris is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC i.e., STORE ELECTRONIC and Tenaris SA go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and Tenaris SA
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 240.65 times less return on investment than Tenaris SA. But when comparing it to its historical volatility, STORE ELECTRONIC is 1.06 times less risky than Tenaris SA. It trades about 0.0 of its potential returns per unit of risk. Tenaris SA is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 2,915 in Tenaris SA on August 29, 2024 and sell it today you would earn a total of 665.00 from holding Tenaris SA or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
STORE ELECTRONIC vs. Tenaris SA
Performance |
| Timeline |
| STORE ELECTRONIC |
| Tenaris SA |
STORE ELECTRONIC and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and Tenaris SA
The main advantage of trading using opposite STORE ELECTRONIC and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC 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.| STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Superior Plus Corp | STORE ELECTRONIC vs. SIVERS SEMICONDUCTORS AB |
| Tenaris SA vs. Sixt Leasing SE | Tenaris SA vs. BYD ELECTRONIC | Tenaris SA vs. Arrow Electronics | Tenaris SA vs. STORE ELECTRONIC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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