Correlation Between Tenaris SA and Helmerich

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

Diversification Opportunities for Tenaris SA and Helmerich

0.71

Correlation Coefficient

Tenaris SA  Helmerich

Poor diversification

The 3 months correlation between Tenaris and Helmerich is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Helmerich and Payne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helmerich and Payne 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 Helmerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helmerich and Payne has no effect on the direction of Tenaris SA i.e., Tenaris SA and Helmerich go up and down completely randomly.

Pair Corralation between Tenaris SA and Helmerich

Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 0.65 times more return on investment than Helmerich. However, Tenaris SA ADR is 1.54 times less risky than Helmerich. It trades about 0.28 of its potential returns per unit of risk. Helmerich and Payne is currently generating about 0.07 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Tenaris SA ADR  vs.  Helmerich and Payne

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.

Helmerich and Payne

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Helmerich and Payne are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Helmerich may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tenaris SA and Helmerich

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

The idea behind Tenaris SA ADR and Helmerich and Payne 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.