Correlation Between Tenaris SA and TGS ASA
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and TGS ASA 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 TGS ASA 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 TGS ASA, you can compare the effects of market volatilities on Tenaris SA and TGS ASA 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 TGS ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and TGS ASA.
Diversification Opportunities for Tenaris SA and TGS ASA
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tenaris and TGS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and TGS ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGS ASA 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 TGS ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGS ASA has no effect on the direction of Tenaris SA i.e., Tenaris SA and TGS ASA go up and down completely randomly.
Pair Corralation between Tenaris SA and TGS ASA
Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.92 times more return on investment than TGS ASA. However, Tenaris SA ADR is 1.09 times less risky than TGS ASA. It trades about 0.28 of its potential returns per unit of risk. TGS ASA is currently generating about -0.06 per unit of risk. If you would invest 2,888 in Tenaris SA ADR on September 2, 2024 and sell it today you would earn a total of 945.00 from holding Tenaris SA ADR or generate 32.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. TGS ASA
Performance |
| Timeline |
| Tenaris SA ADR |
| TGS ASA |
Tenaris SA and TGS ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and TGS ASA
The main advantage of trading using opposite Tenaris SA and TGS ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, TGS ASA 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 TGS ASA will offset losses from the drop in TGS ASA's long position.| Tenaris SA vs. Enerflex | Tenaris SA vs. Now Inc | Tenaris SA vs. Bristow Group | Tenaris SA vs. Helix Energy Solutions |
| TGS ASA vs. Expro Group Holdings | TGS ASA vs. ChampionX | TGS ASA vs. Ranger Energy Services | TGS ASA vs. Cactus 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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