Correlation Between Fidelity Sustainable and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Fidelity Sustainable 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 Fidelity Sustainable and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sustainable USD and TechnipFMC PLC, you can compare the effects of market volatilities on Fidelity Sustainable 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 Fidelity Sustainable with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sustainable and TechnipFMC PLC.
Diversification Opportunities for Fidelity Sustainable and TechnipFMC PLC
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and TechnipFMC is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable USD and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Fidelity Sustainable 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 Fidelity Sustainable USD 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 Fidelity Sustainable i.e., Fidelity Sustainable and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Fidelity Sustainable and TechnipFMC PLC
Assuming the 90 days trading horizon Fidelity Sustainable is expected to generate 7.64 times less return on investment than TechnipFMC PLC. But when comparing it to its historical volatility, Fidelity Sustainable USD is 5.38 times less risky than TechnipFMC PLC. It trades about 0.07 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,852 in TechnipFMC PLC on September 12, 2024 and sell it today you would earn a total of 1,068 from holding TechnipFMC PLC or generate 57.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Sustainable USD vs. TechnipFMC PLC
Performance |
| Timeline |
| Fidelity Sustainable USD |
| TechnipFMC PLC |
Fidelity Sustainable and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sustainable and TechnipFMC PLC
The main advantage of trading using opposite Fidelity Sustainable and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sustainable 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.| Fidelity Sustainable vs. GraniteShares 3x Short | Fidelity Sustainable vs. WisdomTree Natural Gas | Fidelity Sustainable vs. Leverage Shares 3x | Fidelity Sustainable vs. WisdomTree Natural Gas |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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