Correlation Between Caesars Entertainment and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Caesars Entertainment 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 Caesars Entertainment and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caesars Entertainment and TechnipFMC PLC, you can compare the effects of market volatilities on Caesars Entertainment 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 Caesars Entertainment with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caesars Entertainment and TechnipFMC PLC.
Diversification Opportunities for Caesars Entertainment and TechnipFMC PLC
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caesars and TechnipFMC is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Caesars Entertainment and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Caesars Entertainment 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 Caesars Entertainment 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 Caesars Entertainment i.e., Caesars Entertainment and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Caesars Entertainment and TechnipFMC PLC
Considering the 90-day investment horizon Caesars Entertainment is expected to under-perform the TechnipFMC PLC. In addition to that, Caesars Entertainment is 1.23 times more volatile than TechnipFMC PLC. It trades about -0.01 of its total potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.1 per unit of volatility. If you would invest 1,158 in TechnipFMC PLC on September 3, 2024 and sell it today you would earn a total of 1,973 from holding TechnipFMC PLC or generate 170.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caesars Entertainment vs. TechnipFMC PLC
Performance |
| Timeline |
| Caesars Entertainment |
| TechnipFMC PLC |
Caesars Entertainment and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caesars Entertainment and TechnipFMC PLC
The main advantage of trading using opposite Caesars Entertainment and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caesars Entertainment 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.| Caesars Entertainment vs. Las Vegas Sands | Caesars Entertainment vs. Wynn Resorts Limited | Caesars Entertainment vs. Penn National Gaming | Caesars Entertainment vs. Melco Resorts Entertainment |
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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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