Correlation Between TechnipFMC PLC and Calfrac Well
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Calfrac Well 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 Calfrac Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Calfrac Well Services, you can compare the effects of market volatilities on TechnipFMC PLC and Calfrac Well 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 Calfrac Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Calfrac Well.
Diversification Opportunities for TechnipFMC PLC and Calfrac Well
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between TechnipFMC and Calfrac is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services 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 Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Calfrac Well go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Calfrac Well
Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 0.89 times more return on investment than Calfrac Well. However, TechnipFMC PLC is 1.13 times less risky than Calfrac Well. It trades about 0.1 of its potential returns per unit of risk. Calfrac Well Services is currently generating about -0.03 per unit of risk. If you would invest 1,130 in TechnipFMC PLC on September 2, 2024 and sell it today you would earn a total of 2,007 from holding TechnipFMC PLC or generate 177.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. Calfrac Well Services
Performance |
| Timeline |
| TechnipFMC PLC |
| Calfrac Well Services |
TechnipFMC PLC and Calfrac Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Calfrac Well
The main advantage of trading using opposite TechnipFMC PLC and Calfrac Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Calfrac Well 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 Calfrac Well will offset losses from the drop in Calfrac Well's long position.| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
| Calfrac Well vs. Petroleo Brasileiro Petrobras | Calfrac Well vs. Equinor ASA ADR | Calfrac Well vs. Eni SpA ADR | Calfrac Well vs. YPF Sociedad Anonima |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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