Correlation Between Capricorn Energy and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Capricorn Energy 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 Capricorn Energy and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricorn Energy PLC and TechnipFMC PLC, you can compare the effects of market volatilities on Capricorn Energy 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 Capricorn Energy with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricorn Energy and TechnipFMC PLC.
Diversification Opportunities for Capricorn Energy and TechnipFMC PLC
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capricorn and TechnipFMC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Capricorn Energy PLC and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Capricorn Energy 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 Capricorn Energy PLC 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 Capricorn Energy i.e., Capricorn Energy and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Capricorn Energy and TechnipFMC PLC
Assuming the 90 days trading horizon Capricorn Energy PLC is expected to under-perform the TechnipFMC PLC. But the stock apears to be less risky and, when comparing its historical volatility, Capricorn Energy PLC is 1.45 times less risky than TechnipFMC PLC. The stock trades about -0.01 of its potential returns per unit of risk. The TechnipFMC PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 655.00 in TechnipFMC PLC on November 2, 2024 and sell it today you would earn a total of 2,275 from holding TechnipFMC PLC or generate 347.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Capricorn Energy PLC vs. TechnipFMC PLC
Performance |
| Timeline |
| Capricorn Energy PLC |
| TechnipFMC PLC |
Capricorn Energy and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricorn Energy and TechnipFMC PLC
The main advantage of trading using opposite Capricorn Energy and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricorn Energy 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.| Capricorn Energy vs. Datalogic | Capricorn Energy vs. JB Hunt Transport | Capricorn Energy vs. Pets at Home | Capricorn Energy vs. Wizz Air Holdings |
| TechnipFMC PLC vs. Take Two Interactive Software | TechnipFMC PLC vs. Alfa Financial Software | TechnipFMC PLC vs. Vitec Software Group | TechnipFMC PLC vs. Pentair 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |