Correlation Between TechnipFMC PLC and Big Yellow
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Big Yellow 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 TechnipFMC PLC and Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Big Yellow Group, you can compare the effects of market volatilities on TechnipFMC PLC and Big Yellow 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 TechnipFMC PLC with a short position of Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Big Yellow.
Diversification Opportunities for TechnipFMC PLC and Big Yellow
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TechnipFMC and Big is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow Group and TechnipFMC PLC 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 TechnipFMC PLC are associated (or correlated) with Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Big Yellow go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Big Yellow
Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 0.74 times more return on investment than Big Yellow. However, TechnipFMC PLC is 1.35 times less risky than Big Yellow. It trades about 0.1 of its potential returns per unit of risk. Big Yellow Group is currently generating about 0.02 per unit of risk. If you would invest 1,158 in TechnipFMC PLC on September 3, 2024 and sell it today you would earn a total of 1,979 from holding TechnipFMC PLC or generate 170.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.68% |
| Values | Daily Returns |
TechnipFMC PLC vs. Big Yellow Group
Performance |
| Timeline |
| TechnipFMC PLC |
| Big Yellow Group |
TechnipFMC PLC and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Big Yellow
The main advantage of trading using opposite TechnipFMC PLC and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Big Yellow 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 Big Yellow will offset losses from the drop in Big Yellow's long position.| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
| Big Yellow vs. Terreno Realty | Big Yellow vs. LXP Industrial Trust | Big Yellow vs. Rexford Industrial Realty | Big Yellow vs. First Industrial Realty |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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