Correlation Between TechnipFMC PLC and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Ashtead Technology 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 Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Ashtead Technology Holdings, you can compare the effects of market volatilities on TechnipFMC PLC and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Ashtead Technology.
Diversification Opportunities for TechnipFMC PLC and Ashtead Technology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TechnipFMC and Ashtead is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Ashtead Technology go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Ashtead Technology
Assuming the 90 days trading horizon TechnipFMC PLC is expected to generate 0.7 times more return on investment than Ashtead Technology. However, TechnipFMC PLC is 1.44 times less risky than Ashtead Technology. It trades about 0.12 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.08 per unit of risk. If you would invest 2,235 in TechnipFMC PLC on September 3, 2024 and sell it today you would earn a total of 726.00 from holding TechnipFMC PLC or generate 32.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. Ashtead Technology Holdings
Performance |
| Timeline |
| TechnipFMC PLC |
| Ashtead Technology |
TechnipFMC PLC and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Ashtead Technology
The main advantage of trading using opposite TechnipFMC PLC and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| TechnipFMC PLC vs. Zoom Video Communications | TechnipFMC PLC vs. Enbridge | TechnipFMC PLC vs. Endo International PLC | TechnipFMC PLC vs. Invesco Health Care |
| Ashtead Technology vs. International Biotechnology Trust | Ashtead Technology vs. Smithson Investment Trust | Ashtead Technology vs. Air Products Chemicals | Ashtead Technology vs. Monks Investment Trust |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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