Correlation Between Tenaris SA and 25746UCZ0

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Can any of the company-specific risk be diversified away by investing in both Tenaris SA and 25746UCZ0 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 25746UCZ0 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 US25746UCZ03, you can compare the effects of market volatilities on Tenaris SA and 25746UCZ0 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 25746UCZ0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and 25746UCZ0.

Diversification Opportunities for Tenaris SA and 25746UCZ0

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Tenaris and 25746UCZ0 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and US25746UCZ03 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US25746UCZ03 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 25746UCZ0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US25746UCZ03 has no effect on the direction of Tenaris SA i.e., Tenaris SA and 25746UCZ0 go up and down completely randomly.

Pair Corralation between Tenaris SA and 25746UCZ0

Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.98 times more return on investment than 25746UCZ0. However, Tenaris SA ADR is 1.02 times less risky than 25746UCZ0. It trades about 0.04 of its potential returns per unit of risk. US25746UCZ03 is currently generating about 0.01 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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy41.33%
ValuesDaily Returns

Tenaris SA ADR  vs.  US25746UCZ03

 Performance 
       Timeline  
Tenaris SA ADR 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA ADR are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Tenaris SA unveiled solid returns over the last few months and may actually be approaching a breakup point.
US25746UCZ03 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in US25746UCZ03 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 25746UCZ0 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tenaris SA and 25746UCZ0 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tenaris SA and 25746UCZ0

The main advantage of trading using opposite Tenaris SA and 25746UCZ0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, 25746UCZ0 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 25746UCZ0 will offset losses from the drop in 25746UCZ0's long position.
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The idea behind Tenaris SA ADR and US25746UCZ03 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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