Correlation Between Tenaris SA and Schlumberger
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and Schlumberger 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 Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaris SA and Schlumberger Limited, you can compare the effects of market volatilities on Tenaris SA and Schlumberger 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 Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Schlumberger.
Diversification Opportunities for Tenaris SA and Schlumberger
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tenaris and Schlumberger is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited 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 are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger Limited has no effect on the direction of Tenaris SA i.e., Tenaris SA and Schlumberger go up and down completely randomly.
Pair Corralation between Tenaris SA and Schlumberger
Assuming the 90 days horizon Tenaris SA is expected to generate 0.78 times more return on investment than Schlumberger. However, Tenaris SA is 1.28 times less risky than Schlumberger. It trades about 0.41 of its potential returns per unit of risk. Schlumberger Limited is currently generating about 0.2 per unit of risk. If you would invest 2,974 in Tenaris SA on September 3, 2024 and sell it today you would earn a total of 646.00 from holding Tenaris SA or generate 21.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA vs. Schlumberger Limited
Performance |
| Timeline |
| Tenaris SA |
| Schlumberger Limited |
Tenaris SA and Schlumberger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Schlumberger
The main advantage of trading using opposite Tenaris SA and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.| Tenaris SA vs. Digilife Technologies Limited | Tenaris SA vs. THAI BEVERAGE | Tenaris SA vs. NetSol Technologies | Tenaris SA vs. NorAm Drilling AS |
| Schlumberger vs. VIAPLAY GROUP AB | Schlumberger vs. Summit Materials | Schlumberger vs. JD SPORTS FASH | Schlumberger vs. Rayonier Advanced Materials |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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