Correlation Between TechnipFMC PLC and Celebrus Technologies
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Celebrus Technologies 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 Celebrus Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Celebrus Technologies plc, you can compare the effects of market volatilities on TechnipFMC PLC and Celebrus Technologies 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 Celebrus Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Celebrus Technologies.
Diversification Opportunities for TechnipFMC PLC and Celebrus Technologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TechnipFMC and Celebrus is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Celebrus Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celebrus Technologies plc 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 Celebrus Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celebrus Technologies plc has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Celebrus Technologies go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Celebrus Technologies
Assuming the 90 days trading horizon TechnipFMC PLC is expected to generate 0.78 times more return on investment than Celebrus Technologies. However, TechnipFMC PLC is 1.28 times less risky than Celebrus Technologies. It trades about 0.51 of its potential returns per unit of risk. Celebrus Technologies plc is currently generating about 0.17 per unit of risk. If you would invest 2,402 in TechnipFMC PLC on August 31, 2024 and sell it today you would earn a total of 558.00 from holding TechnipFMC PLC or generate 23.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. Celebrus Technologies plc
Performance |
| Timeline |
| TechnipFMC PLC |
| Celebrus Technologies plc |
TechnipFMC PLC and Celebrus Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Celebrus Technologies
The main advantage of trading using opposite TechnipFMC PLC and Celebrus Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Celebrus Technologies 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 Celebrus Technologies will offset losses from the drop in Celebrus Technologies' 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 |
| Celebrus Technologies vs. GB Group plc | Celebrus Technologies vs. Coor Service Management | Celebrus Technologies vs. Surgical Science Sweden | Celebrus Technologies vs. Aeorema Communications 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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