Correlation Between Tenaris SA and Columbia Convertible

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

Diversification Opportunities for Tenaris SA and Columbia Convertible

0.61

Correlation Coefficient

Tenaris SA  Columbia Convertible

Poor diversification

The 3 months correlation between Tenaris and Columbia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and Columbia Convertible Securitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Convertible 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 Columbia Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Convertible has no effect on the direction of Tenaris SA i.e., Tenaris SA and Columbia Convertible go up and down completely randomly.

Pair Corralation between Tenaris SA and Columbia Convertible

Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 3.4 times more return on investment than Columbia Convertible. However, Tenaris SA is 3.4 times more volatile than Columbia Convertible Securities. It trades about 0.08 of its potential returns per unit of risk. Columbia Convertible Securities is currently generating about 0.28 per unit of risk. If you would invest  3,189  in Tenaris SA ADR on May 7, 2025 and sell it today you would earn a total of  278.00  from holding Tenaris SA ADR or generate 8.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Tenaris SA ADR  vs.  Columbia Convertible Securitie

Tenaris SA ADR

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Tenaris SA may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Columbia Convertible

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Convertible Securities are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Columbia Convertible may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tenaris SA and Columbia Convertible

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

The idea behind Tenaris SA ADR and Columbia Convertible Securities 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.