Correlation Between Tenaris SA and Zhihu
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Zhihu 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 Zhihu 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 Zhihu Inc ADR, you can compare the effects of market volatilities on Tenaris SA and Zhihu 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 Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Zhihu.
Diversification Opportunities for Tenaris SA and Zhihu
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tenaris and Zhihu is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR 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 Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of Tenaris SA i.e., Tenaris SA and Zhihu go up and down completely randomly.
Pair Corralation between Tenaris SA and Zhihu
Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.53 times more return on investment than Zhihu. However, Tenaris SA ADR is 1.88 times less risky than Zhihu. It trades about 0.38 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.02 per unit of risk. If you would invest 3,170 in Tenaris SA ADR on August 26, 2024 and sell it today you would earn a total of 572.00 from holding Tenaris SA ADR or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. Zhihu Inc ADR
Performance |
| Timeline |
| Tenaris SA ADR |
| Zhihu Inc ADR |
Tenaris SA and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Zhihu
The main advantage of trading using opposite Tenaris SA and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Zhihu 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 Zhihu will offset losses from the drop in Zhihu's long position.| Tenaris SA vs. ProPetro Holding Corp | Tenaris SA vs. RPC Inc | Tenaris SA vs. MRC Global | Tenaris SA vs. Expro Group Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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