Correlation Between Tenaris SA and Koil Energy
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Koil Energy 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 Tenaris SA and Koil Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaris SA and Koil Energy Solutions, you can compare the effects of market volatilities on Tenaris SA and Koil Energy 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 Tenaris SA with a short position of Koil Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Koil Energy.
Diversification Opportunities for Tenaris SA and Koil Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tenaris and Koil is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA and Koil Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koil Energy Solutions and Tenaris SA 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 Tenaris SA are associated (or correlated) with Koil Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koil Energy Solutions has no effect on the direction of Tenaris SA i.e., Tenaris SA and Koil Energy go up and down completely randomly.
Pair Corralation between Tenaris SA and Koil Energy
Assuming the 90 days horizon Tenaris SA is expected to generate 2.19 times less return on investment than Koil Energy. But when comparing it to its historical volatility, Tenaris SA is 1.98 times less risky than Koil Energy. It trades about 0.08 of its potential returns per unit of risk. Koil Energy Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Koil Energy Solutions on August 31, 2024 and sell it today you would earn a total of 136.00 from holding Koil Energy Solutions or generate 261.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 52.41% |
| Values | Daily Returns |
Tenaris SA vs. Koil Energy Solutions
Performance |
| Timeline |
| Tenaris SA |
| Koil Energy Solutions |
Tenaris SA and Koil Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Koil Energy
The main advantage of trading using opposite Tenaris SA and Koil Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Koil Energy 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 Koil Energy will offset losses from the drop in Koil Energy's long position.| Tenaris SA vs. Geospace Technologies | Tenaris SA vs. MRC Global | Tenaris SA vs. Oil States International | Tenaris SA vs. Natural Gas Services |
| Koil Energy vs. Expro Group Holdings | Koil Energy vs. ChampionX | Koil Energy vs. Ranger Energy Services | Koil Energy vs. Cactus Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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