Correlation Between Enbridge and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Enbridge and TechnipFMC PLC 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 Enbridge and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge and TechnipFMC PLC, you can compare the effects of market volatilities on Enbridge and TechnipFMC PLC 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 Enbridge with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge and TechnipFMC PLC.
Diversification Opportunities for Enbridge and TechnipFMC PLC
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enbridge and TechnipFMC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Enbridge 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 Enbridge are associated (or correlated) with TechnipFMC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnipFMC PLC has no effect on the direction of Enbridge i.e., Enbridge and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Enbridge and TechnipFMC PLC
Assuming the 90 days trading horizon Enbridge is expected to generate 3.02 times less return on investment than TechnipFMC PLC. But when comparing it to its historical volatility, Enbridge is 3.45 times less risky than TechnipFMC PLC. It trades about 0.09 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 655.00 in TechnipFMC PLC on November 2, 2024 and sell it today you would earn a total of 2,275 from holding TechnipFMC PLC or generate 347.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 53.92% |
| Values | Daily Returns |
Enbridge vs. TechnipFMC PLC
Performance |
| Timeline |
| Enbridge |
| TechnipFMC PLC |
Enbridge and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge and TechnipFMC PLC
The main advantage of trading using opposite Enbridge and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge position performs unexpectedly, TechnipFMC PLC 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 TechnipFMC PLC will offset losses from the drop in TechnipFMC PLC's long position.| Enbridge vs. Molson Coors Beverage | Enbridge vs. Associated British Foods | Enbridge vs. Polar Capital Technology | Enbridge vs. Check Point Software |
| TechnipFMC PLC vs. Take Two Interactive Software | TechnipFMC PLC vs. Alfa Financial Software | TechnipFMC PLC vs. Vitec Software Group | TechnipFMC PLC vs. Pentair PLC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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