Correlation Between Aquagold International and Tenaris SA

Can any of the company-specific risk be diversified away by investing in both Aquagold International and Tenaris SA 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 Aquagold International and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquagold International and Tenaris SA, you can compare the effects of market volatilities on Aquagold International and Tenaris SA 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 Aquagold International with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Tenaris SA.

Diversification Opportunities for Aquagold International and Tenaris SA

0.0

Correlation Coefficient

Aquagold International  Tenaris SA

Pay attention - limited upside

The 3 months correlation between Aquagold and Tenaris is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA and Aquagold International 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 Aquagold International are associated (or correlated) with Tenaris SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaris SA has no effect on the direction of Aquagold International i.e., Aquagold International and Tenaris SA go up and down completely randomly.

Pair Corralation between Aquagold International and Tenaris SA

If you would invest  1,391  in Tenaris SA on September 18, 2024 and sell it today you would earn a total of  485.00  from holding Tenaris SA or generate 34.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Aquagold International  vs.  Tenaris SA

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Tenaris SA

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Tenaris SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Tenaris SA

The main advantage of trading using opposite Aquagold International and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Tenaris SA 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 Tenaris SA will offset losses from the drop in Tenaris SA's long position.

The idea behind Aquagold International and Tenaris SA 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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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.