Correlation Between Tenaris SA and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Sphere Entertainment 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 Sphere Entertainment 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 Sphere Entertainment Co, you can compare the effects of market volatilities on Tenaris SA and Sphere Entertainment 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 Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Sphere Entertainment.
Diversification Opportunities for Tenaris SA and Sphere Entertainment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tenaris and Sphere is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Tenaris SA i.e., Tenaris SA and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Tenaris SA and Sphere Entertainment
Allowing for the 90-day total investment horizon Tenaris SA is expected to generate 31.12 times less return on investment than Sphere Entertainment. But when comparing it to its historical volatility, Tenaris SA ADR is 1.91 times less risky than Sphere Entertainment. It trades about 0.02 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,151 in Sphere Entertainment Co on November 3, 2024 and sell it today you would earn a total of 528.00 from holding Sphere Entertainment Co or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. Sphere Entertainment Co
Performance |
| Timeline |
| Tenaris SA ADR |
| Sphere Entertainment |
Tenaris SA and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Sphere Entertainment
The main advantage of trading using opposite Tenaris SA and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment's long position.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
| Sphere Entertainment vs. Sonida Senior Living | Sphere Entertainment vs. Universal Music Group | Sphere Entertainment vs. NetEase | Sphere Entertainment vs. Jabil Circuit |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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