Correlation Between Forum Energy and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both Forum Energy 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 Forum Energy and Tenaris SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Technologies and Tenaris SA ADR, you can compare the effects of market volatilities on Forum Energy 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 Forum Energy with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Tenaris SA.
Diversification Opportunities for Forum Energy and Tenaris SA
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Forum and Tenaris is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Tenaris SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA ADR and Forum Energy 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 Forum Energy Technologies 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 ADR has no effect on the direction of Forum Energy i.e., Forum Energy and Tenaris SA go up and down completely randomly.
Pair Corralation between Forum Energy and Tenaris SA
Considering the 90-day investment horizon Forum Energy Technologies is expected to generate 1.87 times more return on investment than Tenaris SA. However, Forum Energy is 1.87 times more volatile than Tenaris SA ADR. It trades about 0.0 of its potential returns per unit of risk. Tenaris SA ADR is currently generating about -0.02 per unit of risk. If you would invest 2,079 in Forum Energy Technologies on March 24, 2025 and sell it today you would lose (117.00) from holding Forum Energy Technologies or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Technologies vs. Tenaris SA ADR
Performance |
| Timeline |
| Forum Energy Technologies |
| Tenaris SA ADR |
Forum Energy and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Tenaris SA
The main advantage of trading using opposite Forum Energy and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy 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.| Forum Energy vs. Natural Gas Services | Forum Energy vs. Enerflex | Forum Energy vs. Now Inc | Forum Energy vs. Bristow Group |
| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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