Correlation Between Tenaris SA and ConocoPhillips

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

Diversification Opportunities for Tenaris SA and ConocoPhillips

-0.03

Correlation Coefficient

Tenaris SA  ConocoPhillips

Good diversification

The 3 months correlation between Tenaris and ConocoPhillips is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips 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 ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Tenaris SA i.e., Tenaris SA and ConocoPhillips go up and down completely randomly.

Pair Corralation between Tenaris SA and ConocoPhillips

Allowing for the 90-day total investment horizon Tenaris SA ADR is expected to generate 1.08 times more return on investment than ConocoPhillips. However, Tenaris SA is 1.08 times more volatile than ConocoPhillips. It trades about 0.14 of its potential returns per unit of risk. ConocoPhillips is currently generating about -0.03 per unit of risk. If you would invest  3,533  in Tenaris SA ADR on August 6, 2025 and sell it today you would earn a total of  540.00  from holding Tenaris SA ADR or generate 15.28% 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.  ConocoPhillips

Tenaris SA ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaris SA ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Tenaris SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

ConocoPhillips

Risk-Adjusted Performance

Weakest

Over the last 90 days ConocoPhillips has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ConocoPhillips is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Tenaris SA and ConocoPhillips

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

The idea behind Tenaris SA ADR and ConocoPhillips 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.