Correlation Between Tenaris SA and Delek Drilling
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Delek Drilling 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 Delek Drilling 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 Delek Drilling , you can compare the effects of market volatilities on Tenaris SA and Delek Drilling 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 Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Delek Drilling.
Diversification Opportunities for Tenaris SA and Delek Drilling
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tenaris and Delek is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling 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 Delek Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Drilling has no effect on the direction of Tenaris SA i.e., Tenaris SA and Delek Drilling go up and down completely randomly.
Pair Corralation between Tenaris SA and Delek Drilling
Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 1.45 times more return on investment than Delek Drilling. However, Tenaris SA is 1.45 times more volatile than Delek Drilling . It trades about 0.4 of its potential returns per unit of risk. Delek Drilling is currently generating about 0.17 per unit of risk. If you would invest 3,189 in Tenaris SA ADR on August 30, 2024 and sell it today you would earn a total of 620.00 from holding Tenaris SA ADR or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tenaris SA ADR vs. Delek Drilling
Performance |
| Timeline |
| Tenaris SA ADR |
| Delek Drilling |
Tenaris SA and Delek Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Delek Drilling
The main advantage of trading using opposite Tenaris SA and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Delek Drilling 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 Delek Drilling will offset losses from the drop in Delek Drilling's long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
| Delek Drilling vs. Permian Resources | Delek Drilling vs. Devon Energy | Delek Drilling vs. EOG Resources | Delek Drilling vs. Coterra Energy |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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