Correlation Between National Energy and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both National 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 National 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 National Energy Services and Tenaris SA ADR, you can compare the effects of market volatilities on National 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 National Energy with a short position of Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Energy and Tenaris SA.
Diversification Opportunities for National Energy and Tenaris SA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Tenaris is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding National Energy Services 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 National 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 National Energy Services 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 National Energy i.e., National Energy and Tenaris SA go up and down completely randomly.
Pair Corralation between National Energy and Tenaris SA
Given the investment horizon of 90 days National Energy Services is expected to under-perform the Tenaris SA. In addition to that, National Energy is 1.64 times more volatile than Tenaris SA ADR. It trades about -0.08 of its total potential returns per unit of risk. Tenaris SA ADR is currently generating about -0.01 per unit of volatility. If you would invest 3,782 in Tenaris SA ADR on March 28, 2025 and sell it today you would lose (133.00) from holding Tenaris SA ADR or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Energy Services vs. Tenaris SA ADR
Performance |
| Timeline |
| National Energy Services |
| Tenaris SA ADR |
National Energy and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Energy and Tenaris SA
The main advantage of trading using opposite National Energy and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National 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.| National Energy vs. Dawson Geophysical | National Energy vs. Mccoy Global | National Energy vs. Ranger Energy Services | National Energy vs. MRC Global |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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