Correlation Between Agrify Corp and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Agrify Corp 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 Agrify Corp and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrify Corp and TechnipFMC PLC, you can compare the effects of market volatilities on Agrify Corp 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 Agrify Corp with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrify Corp and TechnipFMC PLC.
Diversification Opportunities for Agrify Corp and TechnipFMC PLC
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agrify and TechnipFMC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Agrify Corp and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Agrify Corp 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 Agrify Corp 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 Agrify Corp i.e., Agrify Corp and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Agrify Corp and TechnipFMC PLC
Given the investment horizon of 90 days Agrify Corp is expected to generate 5.04 times more return on investment than TechnipFMC PLC. However, Agrify Corp is 5.04 times more volatile than TechnipFMC PLC. It trades about 0.04 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.11 per unit of risk. If you would invest 6,210 in Agrify Corp on September 4, 2024 and sell it today you would lose (1,042) from holding Agrify Corp or give up 16.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrify Corp vs. TechnipFMC PLC
Performance |
| Timeline |
| Agrify Corp |
| TechnipFMC PLC |
Agrify Corp and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrify Corp and TechnipFMC PLC
The main advantage of trading using opposite Agrify Corp and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrify Corp 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.| Agrify Corp vs. MYR Group | Agrify Corp vs. Granite Construction Incorporated | Agrify Corp vs. Construction Partners | Agrify Corp vs. Great Lakes Dredge |
| TechnipFMC PLC vs. Oil States International | TechnipFMC PLC vs. Geospace Technologies | TechnipFMC PLC vs. Weatherford International PLC | TechnipFMC PLC vs. Enerflex |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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