Correlation Between Tenaris SA and Aegon Funding
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Aegon Funding 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 Aegon Funding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaris SA ADR and Aegon Funding, you can compare the effects of market volatilities on Tenaris SA and Aegon Funding 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 Aegon Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Aegon Funding.
Diversification Opportunities for Tenaris SA and Aegon Funding
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tenaris and Aegon is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding 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 ADR are associated (or correlated) with Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of Tenaris SA i.e., Tenaris SA and Aegon Funding go up and down completely randomly.
Pair Corralation between Tenaris SA and Aegon Funding
Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 1.95 times more return on investment than Aegon Funding. However, Tenaris SA is 1.95 times more volatile than Aegon Funding. It trades about 0.07 of its potential returns per unit of risk. Aegon Funding is currently generating about 0.03 per unit of risk. If you would invest 2,644 in Tenaris SA ADR on August 31, 2024 and sell it today you would earn a total of 1,189 from holding Tenaris SA ADR or generate 44.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. Aegon Funding
Performance |
| Timeline |
| Tenaris SA ADR |
| Aegon Funding |
Tenaris SA and Aegon Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Aegon Funding
The main advantage of trading using opposite Tenaris SA and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Aegon Funding 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 Aegon Funding will offset losses from the drop in Aegon Funding's long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
| Aegon Funding vs. Petroleo Brasileiro Petrobras | Aegon Funding vs. Equinor ASA ADR | Aegon Funding vs. Eni SpA ADR | Aegon Funding vs. YPF Sociedad Anonima |
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..
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