Correlation Between TechnipFMC PLC and ChampionX
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and ChampionX 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 ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and ChampionX, you can compare the effects of market volatilities on TechnipFMC PLC and ChampionX 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 ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and ChampionX.
Diversification Opportunities for TechnipFMC PLC and ChampionX
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between TechnipFMC and ChampionX is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and ChampionX go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and ChampionX
Considering the 90-day investment horizon TechnipFMC PLC is expected to under-perform the ChampionX. But the stock apears to be less risky and, when comparing its historical volatility, TechnipFMC PLC is 1.11 times less risky than ChampionX. The stock trades about -0.19 of its potential returns per unit of risk. The ChampionX is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 3,121 in ChampionX on November 18, 2024 and sell it today you would lose (177.00) from holding ChampionX or give up 5.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. ChampionX
Performance |
| Timeline |
| TechnipFMC PLC |
| ChampionX |
TechnipFMC PLC and ChampionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and ChampionX
The main advantage of trading using opposite TechnipFMC PLC and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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