Correlation Between Tenaris SA and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Kenon Holdings 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 Kenon Holdings 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 Kenon Holdings, you can compare the effects of market volatilities on Tenaris SA and Kenon Holdings 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Kenon Holdings.
Diversification Opportunities for Tenaris SA and Kenon Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tenaris and Kenon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Tenaris SA i.e., Tenaris SA and Kenon Holdings go up and down completely randomly.
Pair Corralation between Tenaris SA and Kenon Holdings
Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 1.08 times more return on investment than Kenon Holdings. However, Tenaris SA is 1.08 times more volatile than Kenon Holdings. It trades about 0.39 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.15 per unit of risk. If you would invest 3,183 in Tenaris SA ADR on August 28, 2024 and sell it today you would earn a total of 578.00 from holding Tenaris SA ADR or generate 18.16% 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. Kenon Holdings
Performance |
| Timeline |
| Tenaris SA ADR |
| Kenon Holdings |
Tenaris SA and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Kenon Holdings
The main advantage of trading using opposite Tenaris SA and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Kenon Holdings 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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