Correlation Between TechnipFMC PLC and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Eiffage 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 TechnipFMC PLC and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Eiffage SA, you can compare the effects of market volatilities on TechnipFMC PLC and Eiffage 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 TechnipFMC PLC with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Eiffage SA.
Diversification Opportunities for TechnipFMC PLC and Eiffage SA
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TechnipFMC and Eiffage is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and TechnipFMC PLC 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 TechnipFMC PLC are associated (or correlated) with Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Eiffage SA go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Eiffage SA
Assuming the 90 days trading horizon TechnipFMC PLC is expected to generate 1.36 times more return on investment than Eiffage SA. However, TechnipFMC PLC is 1.36 times more volatile than Eiffage SA. It trades about 0.11 of its potential returns per unit of risk. Eiffage SA is currently generating about -0.09 per unit of risk. If you would invest 2,288 in TechnipFMC PLC on September 1, 2024 and sell it today you would earn a total of 678.00 from holding TechnipFMC PLC or generate 29.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
TechnipFMC PLC vs. Eiffage SA
Performance |
| Timeline |
| TechnipFMC PLC |
| Eiffage SA |
TechnipFMC PLC and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Eiffage SA
The main advantage of trading using opposite TechnipFMC PLC and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Eiffage 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.| TechnipFMC PLC vs. Molson Coors Beverage | TechnipFMC PLC vs. Evolution Gaming Group | TechnipFMC PLC vs. Kinnevik Investment AB | TechnipFMC PLC vs. Intuitive Investments Group |
| Eiffage SA vs. Uniper SE | Eiffage SA vs. Mulberry Group PLC | Eiffage SA vs. London Security Plc | Eiffage SA vs. Triad Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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