Correlation Between Tenaris SA and Ascent Solar

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

Diversification Opportunities for Tenaris SA and Ascent Solar

-0.2

Correlation Coefficient

Tenaris SA  Ascent Solar

Good diversification

The 3 months correlation between Tenaris and Ascent is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Ascent Solar Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technol 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 Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technol has no effect on the direction of Tenaris SA i.e., Tenaris SA and Ascent Solar go up and down completely randomly.

Pair Corralation between Tenaris SA and Ascent Solar

Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.28 times more return on investment than Ascent Solar. However, Tenaris SA ADR is 3.51 times less risky than Ascent Solar. It trades about 0.28 of its potential returns per unit of risk. Ascent Solar Technologies, is currently generating about 0.04 per unit of risk. If you would invest  2,888  in Tenaris SA ADR on September 3, 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tenaris SA ADR  vs.  Ascent Solar Technologies,

Tenaris SA ADR

Risk-Adjusted Performance

22 of 100

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 inconsistent basic indicators, Tenaris SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ascent Solar Technol

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ascent Solar Technologies, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Ascent Solar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tenaris SA and Ascent Solar

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

The idea behind Tenaris SA ADR and Ascent Solar Technologies, 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.