Correlation Between TechnipFMC PLC and Rockfire Resources
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Rockfire Resources 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 Rockfire Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Rockfire Resources plc, you can compare the effects of market volatilities on TechnipFMC PLC and Rockfire Resources 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 Rockfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Rockfire Resources.
Diversification Opportunities for TechnipFMC PLC and Rockfire Resources
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TechnipFMC and Rockfire is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Rockfire Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockfire Resources 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 Rockfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockfire Resources plc has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Rockfire Resources go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Rockfire Resources
If you would invest 2,450 in TechnipFMC PLC on September 5, 2024 and sell it today you would earn a total of 555.00 from holding TechnipFMC PLC or generate 22.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TechnipFMC PLC vs. Rockfire Resources plc
Performance |
| Timeline |
| TechnipFMC PLC |
| Rockfire Resources plc |
TechnipFMC PLC and Rockfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Rockfire Resources
The main advantage of trading using opposite TechnipFMC PLC and Rockfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Rockfire Resources 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 Rockfire Resources will offset losses from the drop in Rockfire Resources' long position.| TechnipFMC PLC vs. Zoom Video Communications | TechnipFMC PLC vs. Enbridge | TechnipFMC PLC vs. Endo International PLC | TechnipFMC PLC vs. Reckitt Benckiser Group |
| Rockfire Resources vs. TechnipFMC PLC | Rockfire Resources vs. Made Tech Group | Rockfire Resources vs. Microchip Technology | Rockfire Resources vs. DXC Technology Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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