Correlation Between Tenaris SA and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Southwest Airlines 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 Southwest Airlines 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 Southwest Airlines, you can compare the effects of market volatilities on Tenaris SA and Southwest Airlines 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 Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Southwest Airlines.
Diversification Opportunities for Tenaris SA and Southwest Airlines
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tenaris and Southwest is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Southwest Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines 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 Southwest Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwest Airlines has no effect on the direction of Tenaris SA i.e., Tenaris SA and Southwest Airlines go up and down completely randomly.
Pair Corralation between Tenaris SA and Southwest Airlines
Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.86 times more return on investment than Southwest Airlines. However, Tenaris SA ADR is 1.17 times less risky than Southwest Airlines. It trades about 0.04 of its potential returns per unit of risk. Southwest Airlines is currently generating about 0.0 per unit of risk. If you would invest 3,019 in Tenaris SA ADR on September 2, 2024 and sell it today you would earn a total of 814.00 from holding Tenaris SA ADR or generate 26.96% 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. Southwest Airlines
Performance |
| Timeline |
| Tenaris SA ADR |
| Southwest Airlines |
Tenaris SA and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Southwest Airlines
The main advantage of trading using opposite Tenaris SA and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Southwest Airlines 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 Southwest Airlines will offset losses from the drop in Southwest Airlines' long position.| Tenaris SA vs. Enerflex | Tenaris SA vs. Now Inc | Tenaris SA vs. Bristow Group | Tenaris SA vs. Helix Energy Solutions |
| Southwest Airlines vs. United Airlines Holdings | Southwest Airlines vs. American Airlines Group | Southwest Airlines vs. JetBlue Airways Corp | Southwest Airlines vs. Delta Air Lines |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |