Correlation Between TechnipFMC PLC and First Majestic
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and First Majestic 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 First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and First Majestic Silver, you can compare the effects of market volatilities on TechnipFMC PLC and First Majestic 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 First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and First Majestic.
Diversification Opportunities for TechnipFMC PLC and First Majestic
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TechnipFMC and First is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver 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 First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and First Majestic go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and First Majestic
Assuming the 90 days trading horizon TechnipFMC PLC is expected to generate 1.26 times more return on investment than First Majestic. However, TechnipFMC PLC is 1.26 times more volatile than First Majestic Silver. It trades about 0.08 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of risk. If you would invest 655.00 in TechnipFMC PLC on August 31, 2024 and sell it today you would earn a total of 2,305 from holding TechnipFMC PLC or generate 351.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. First Majestic Silver
Performance |
| Timeline |
| TechnipFMC PLC |
| First Majestic Silver |
TechnipFMC PLC and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and First Majestic
The main advantage of trading using opposite TechnipFMC PLC and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| TechnipFMC PLC vs. Universal Display Corp | TechnipFMC PLC vs. Playtech Plc | TechnipFMC PLC vs. Kinnevik Investment AB | TechnipFMC PLC vs. Flow Traders NV |
| First Majestic vs. Martin Marietta Materials | First Majestic vs. Elmos Semiconductor SE | First Majestic vs. Alior Bank SA | First Majestic vs. TechnipFMC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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