Correlation Between TechnipFMC PLC and City Developments
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and City Developments 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 City Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and City Developments Limited, you can compare the effects of market volatilities on TechnipFMC PLC and City Developments 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 City Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and City Developments.
Diversification Opportunities for TechnipFMC PLC and City Developments
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TechnipFMC and City is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and City Developments Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Developments 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 City Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Developments has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and City Developments go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and City Developments
Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 1.17 times more return on investment than City Developments. However, TechnipFMC PLC is 1.17 times more volatile than City Developments Limited. It trades about 0.1 of its potential returns per unit of risk. City Developments Limited is currently generating about -0.08 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 | Very Weak |
| Accuracy | 49.09% |
| Values | Daily Returns |
TechnipFMC PLC vs. City Developments Limited
Performance |
| Timeline |
| TechnipFMC PLC |
| City Developments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TechnipFMC PLC and City Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and City Developments
The main advantage of trading using opposite TechnipFMC PLC and City Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, City Developments 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 City Developments will offset losses from the drop in City Developments' long position.| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
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
| Transaction History View history of all your transactions and understand their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |