Correlation Between TechnipFMC PLC and Schlumberger
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Schlumberger 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 Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Schlumberger Limited, you can compare the effects of market volatilities on TechnipFMC PLC and Schlumberger 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 Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Schlumberger.
Diversification Opportunities for TechnipFMC PLC and Schlumberger
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TechnipFMC and Schlumberger is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited 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 Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger Limited has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Schlumberger go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Schlumberger
Assuming the 90 days horizon TechnipFMC PLC is expected to generate 13.56 times less return on investment than Schlumberger. But when comparing it to its historical volatility, TechnipFMC PLC is 1.28 times less risky than Schlumberger. It trades about 0.01 of its potential returns per unit of risk. Schlumberger Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,805 in Schlumberger Limited on November 2, 2024 and sell it today you would earn a total of 205.00 from holding Schlumberger Limited or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. Schlumberger Limited
Performance |
| Timeline |
| TechnipFMC PLC |
| Schlumberger Limited |
TechnipFMC PLC and Schlumberger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Schlumberger
The main advantage of trading using opposite TechnipFMC PLC and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.| TechnipFMC PLC vs. Superior Plus Corp | TechnipFMC PLC vs. Origin Agritech | TechnipFMC PLC vs. Identiv | TechnipFMC PLC vs. INTUITIVE SURGICAL |
| Schlumberger vs. STGEORGE MINING LTD | Schlumberger vs. MCEWEN MINING INC | Schlumberger vs. ANGLO ASIAN MINING | Schlumberger vs. NAKED WINES 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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