Correlation Between Tenaris SA and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and GameStop 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 GameStop 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 GameStop Corp, you can compare the effects of market volatilities on Tenaris SA and GameStop 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 GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and GameStop Corp.
Diversification Opportunities for Tenaris SA and GameStop Corp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tenaris and GameStop is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop 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 GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Tenaris SA i.e., Tenaris SA and GameStop Corp go up and down completely randomly.
Pair Corralation between Tenaris SA and GameStop Corp
Allowing for the 90-day total investment horizon Tenaris SA is expected to generate 1.2 times less return on investment than GameStop Corp. But when comparing it to its historical volatility, Tenaris SA ADR is 3.08 times less risky than GameStop Corp. It trades about 0.26 of its potential returns per unit of risk. GameStop Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,684 in GameStop Corp on September 13, 2024 and sell it today you would earn a total of 191.00 from holding GameStop Corp or generate 7.12% 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. GameStop Corp
Performance |
| Timeline |
| Tenaris SA ADR |
| GameStop Corp |
Tenaris SA and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and GameStop Corp
The main advantage of trading using opposite Tenaris SA and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, GameStop 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
| GameStop Corp vs. Arhaus Inc | GameStop Corp vs. Floor Decor Holdings | GameStop Corp vs. Live Ventures | GameStop Corp vs. Macys 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |