Correlation Between Deltex Medical and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Deltex Medical 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 Deltex Medical and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and TechnipFMC PLC, you can compare the effects of market volatilities on Deltex Medical 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 Deltex Medical with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and TechnipFMC PLC.
Diversification Opportunities for Deltex Medical and TechnipFMC PLC
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deltex and TechnipFMC is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Deltex Medical 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 Deltex Medical Group 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 Deltex Medical i.e., Deltex Medical and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Deltex Medical and TechnipFMC PLC
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the TechnipFMC PLC. In addition to that, Deltex Medical is 1.83 times more volatile than TechnipFMC PLC. It trades about -0.22 of its total potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.5 per unit of volatility. If you would invest 2,444 in TechnipFMC PLC on September 2, 2024 and sell it today you would earn a total of 522.00 from holding TechnipFMC PLC or generate 21.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltex Medical Group vs. TechnipFMC PLC
Performance |
| Timeline |
| Deltex Medical Group |
| TechnipFMC PLC |
Deltex Medical and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and TechnipFMC PLC
The main advantage of trading using opposite Deltex Medical and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical 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.| Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Hyundai Motor | Deltex Medical vs. Toyota Motor Corp |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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