Correlation Between TechnipFMC PLC and Greenway Technologies
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Greenway Technologies 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 Greenway Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Greenway Technologies, you can compare the effects of market volatilities on TechnipFMC PLC and Greenway Technologies 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 Greenway Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Greenway Technologies.
Diversification Opportunities for TechnipFMC PLC and Greenway Technologies
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TechnipFMC and Greenway is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Greenway Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenway Technologies 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 Greenway Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenway Technologies has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Greenway Technologies go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Greenway Technologies
Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 4.82 times less return on investment than Greenway Technologies. But when comparing it to its historical volatility, TechnipFMC PLC is 11.02 times less risky than Greenway Technologies. It trades about 0.49 of its potential returns per unit of risk. Greenway Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Greenway Technologies on September 2, 2024 and sell it today you would earn a total of 1.10 from holding Greenway Technologies or generate 55.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. Greenway Technologies
Performance |
| Timeline |
| TechnipFMC PLC |
| Greenway Technologies |
TechnipFMC PLC and Greenway Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Greenway Technologies
The main advantage of trading using opposite TechnipFMC PLC and Greenway Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Greenway Technologies 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 Greenway Technologies will offset losses from the drop in Greenway Technologies' long position.| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
| Greenway Technologies vs. Calfrac Well Services | Greenway Technologies vs. Akastor ASA | Greenway Technologies vs. Trican Well Service | Greenway Technologies vs. Us Energy Initiative |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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