Correlation Between Tenaris SA and Philip Morris
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Philip Morris 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 Philip Morris 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 Philip Morris International, you can compare the effects of market volatilities on Tenaris SA and Philip Morris 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 Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Philip Morris.
Diversification Opportunities for Tenaris SA and Philip Morris
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tenaris and Philip is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Philip Morris International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris Intern 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 Philip Morris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philip Morris Intern has no effect on the direction of Tenaris SA i.e., Tenaris SA and Philip Morris go up and down completely randomly.
Pair Corralation between Tenaris SA and Philip Morris
Allowing for the 90-day total investment horizon Tenaris SA is expected to generate 1.43 times less return on investment than Philip Morris. In addition to that, Tenaris SA is 1.2 times more volatile than Philip Morris International. It trades about 0.09 of its total potential returns per unit of risk. Philip Morris International is currently generating about 0.16 per unit of volatility. If you would invest 10,051 in Philip Morris International on September 1, 2024 and sell it today you would earn a total of 3,255 from holding Philip Morris International or generate 32.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. Philip Morris International
Performance |
| Timeline |
| Tenaris SA ADR |
| Philip Morris Intern |
Tenaris SA and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Philip Morris
The main advantage of trading using opposite Tenaris SA and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Philip Morris 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 Philip Morris will offset losses from the drop in Philip Morris' long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
| Philip Morris vs. British American Tobacco | Philip Morris vs. Universal | Philip Morris vs. Imperial Brands PLC | Philip Morris vs. Altria Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |