Correlation Between SilverCrest Metals and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both SilverCrest Metals and TechnipFMC PLC 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 SilverCrest Metals and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverCrest Metals and TechnipFMC PLC, you can compare the effects of market volatilities on SilverCrest Metals and TechnipFMC PLC 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 SilverCrest Metals with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and TechnipFMC PLC.
Diversification Opportunities for SilverCrest Metals and TechnipFMC PLC
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SilverCrest and TechnipFMC is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and SilverCrest Metals 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 SilverCrest Metals are associated (or correlated) with TechnipFMC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnipFMC PLC has no effect on the direction of SilverCrest Metals i.e., SilverCrest Metals and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between SilverCrest Metals and TechnipFMC PLC
Assuming the 90 days trading horizon SilverCrest Metals is expected to generate 3.73 times more return on investment than TechnipFMC PLC. However, SilverCrest Metals is 3.73 times more volatile than TechnipFMC PLC. It trades about 0.26 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.18 per unit of risk. If you would invest 1,373 in SilverCrest Metals on September 13, 2024 and sell it today you would earn a total of 189.00 from holding SilverCrest Metals or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 39.13% |
| Values | Daily Returns |
SilverCrest Metals vs. TechnipFMC PLC
Performance |
| Timeline |
| SilverCrest Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| TechnipFMC PLC |
SilverCrest Metals and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverCrest Metals and TechnipFMC PLC
The main advantage of trading using opposite SilverCrest Metals and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest Metals position performs unexpectedly, TechnipFMC PLC 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 TechnipFMC PLC will offset losses from the drop in TechnipFMC PLC's long position.| SilverCrest Metals vs. BioNTech SE | SilverCrest Metals vs. Teradata Corp | SilverCrest Metals vs. Celebrus Technologies plc | SilverCrest Metals vs. L3Harris Technologies |
| TechnipFMC PLC vs. Liberty Media Corp | TechnipFMC PLC vs. Symphony Environmental Technologies | TechnipFMC PLC vs. Dentsply Sirona | TechnipFMC PLC vs. Intermediate Capital Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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