Correlation Between Tenaris SA and Cameco Corp
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Cameco Corp 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 Cameco Corp 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 Cameco Corp, you can compare the effects of market volatilities on Tenaris SA and Cameco Corp 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 Cameco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Cameco Corp.
Diversification Opportunities for Tenaris SA and Cameco Corp
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tenaris and Cameco is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Cameco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameco Corp 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 Cameco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameco Corp has no effect on the direction of Tenaris SA i.e., Tenaris SA and Cameco Corp go up and down completely randomly.
Pair Corralation between Tenaris SA and Cameco Corp
Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.35 times more return on investment than Cameco Corp. However, Tenaris SA ADR is 2.84 times less risky than Cameco Corp. It trades about 0.0 of its potential returns per unit of risk. Cameco Corp is currently generating about -0.08 per unit of risk. If you would invest 3,867 in Tenaris SA ADR on November 18, 2024 and sell it today you would lose (3.00) from holding Tenaris SA ADR or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. Cameco Corp
Performance |
| Timeline |
| Tenaris SA ADR |
| Cameco Corp |
Tenaris SA and Cameco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Cameco Corp
The main advantage of trading using opposite Tenaris SA and Cameco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Cameco Corp 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 Cameco Corp will offset losses from the drop in Cameco Corp's long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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