Correlation Between TechnipFMC PLC and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and SilverCrest Metals 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 SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and SilverCrest Metals, you can compare the effects of market volatilities on TechnipFMC PLC and SilverCrest Metals 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 SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and SilverCrest Metals.
Diversification Opportunities for TechnipFMC PLC and SilverCrest Metals
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TechnipFMC and SilverCrest is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and SilverCrest Metals go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and SilverCrest Metals
Assuming the 90 days trading horizon TechnipFMC PLC is expected to generate 2.11 times less return on investment than SilverCrest Metals. But when comparing it to its historical volatility, TechnipFMC PLC is 3.21 times less risky than SilverCrest Metals. It trades about 0.23 of its potential returns per unit of risk. SilverCrest Metals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,439 in SilverCrest Metals on September 13, 2024 and sell it today you would earn a total of 185.00 from holding SilverCrest Metals or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 39.53% |
| Values | Daily Returns |
TechnipFMC PLC vs. SilverCrest Metals
Performance |
| Timeline |
| TechnipFMC PLC |
| SilverCrest Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
TechnipFMC PLC and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and SilverCrest Metals
The main advantage of trading using opposite TechnipFMC PLC and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| TechnipFMC PLC vs. Broadridge Financial Solutions | TechnipFMC PLC vs. Fair Oaks Income | TechnipFMC PLC vs. Alaska Air Group | TechnipFMC PLC vs. Mindflair Plc |
| SilverCrest Metals vs. TechnipFMC PLC | SilverCrest Metals vs. Playtech Plc | SilverCrest Metals vs. Symphony Environmental Technologies | SilverCrest Metals vs. Raytheon Technologies Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |