Correlation Between TechnipFMC PLC and Now
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Now 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 Now into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Now Inc, you can compare the effects of market volatilities on TechnipFMC PLC and Now 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 Now. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Now.
Diversification Opportunities for TechnipFMC PLC and Now
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TechnipFMC and Now is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Now Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Inc 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 Now. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Now Inc has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Now go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Now
Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 0.78 times more return on investment than Now. However, TechnipFMC PLC is 1.28 times less risky than Now. It trades about 0.11 of its potential returns per unit of risk. Now Inc is currently generating about 0.07 per unit of risk. If you would invest 1,851 in TechnipFMC PLC on November 9, 2024 and sell it today you would earn a total of 1,232 from holding TechnipFMC PLC or generate 66.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. Now Inc
Performance |
| Timeline |
| TechnipFMC PLC |
| Now Inc |
TechnipFMC PLC and Now Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Now
The main advantage of trading using opposite TechnipFMC PLC and Now positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Now 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 Now will offset losses from the drop in Now's long position.| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Enerflex |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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