Correlation Between Tenaris SA and Enerflex
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Enerflex 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 Enerflex 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 Enerflex, you can compare the effects of market volatilities on Tenaris SA and Enerflex 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 Enerflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Enerflex.
Diversification Opportunities for Tenaris SA and Enerflex
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tenaris and Enerflex is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex 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 Enerflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerflex has no effect on the direction of Tenaris SA i.e., Tenaris SA and Enerflex go up and down completely randomly.
Pair Corralation between Tenaris SA and Enerflex
Allowing for the 90-day total investment horizon Tenaris SA is expected to generate 2.08 times less return on investment than Enerflex. But when comparing it to its historical volatility, Tenaris SA ADR is 1.01 times less risky than Enerflex. It trades about 0.41 of its potential returns per unit of risk. Enerflex is currently generating about 0.84 of returns per unit of risk over similar time horizon. If you would invest 638.00 in Enerflex on August 30, 2024 and sell it today you would earn a total of 287.00 from holding Enerflex or generate 44.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. Enerflex
Performance |
| Timeline |
| Tenaris SA ADR |
| Enerflex |
Tenaris SA and Enerflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Enerflex
The main advantage of trading using opposite Tenaris SA and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Enerflex 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 Enerflex will offset losses from the drop in Enerflex's long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Newpark Resources |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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