Correlation Between TechnipFMC PLC and Beowulf Mining
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Beowulf Mining 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 Beowulf Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Beowulf Mining, you can compare the effects of market volatilities on TechnipFMC PLC and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Beowulf Mining.
Diversification Opportunities for TechnipFMC PLC and Beowulf Mining
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TechnipFMC and Beowulf is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining 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 Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Beowulf Mining go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Beowulf Mining
Assuming the 90 days trading horizon TechnipFMC PLC is expected to generate 0.49 times more return on investment than Beowulf Mining. However, TechnipFMC PLC is 2.04 times less risky than Beowulf Mining. It trades about 0.12 of its potential returns per unit of risk. Beowulf Mining is currently generating about -0.12 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. Beowulf Mining
Performance |
| Timeline |
| TechnipFMC PLC |
| Beowulf Mining |
TechnipFMC PLC and Beowulf Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Beowulf Mining
The main advantage of trading using opposite TechnipFMC PLC and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining'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 |
| Beowulf Mining vs. Eastman Chemical Co | Beowulf Mining vs. Fresenius Medical Care | Beowulf Mining vs. InterContinental Hotels Group | Beowulf Mining vs. Westlake Chemical 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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