Correlation Between TechnipFMC PLC and National Energy
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and National Energy 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 National Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and National Energy Services, you can compare the effects of market volatilities on TechnipFMC PLC and National Energy 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 National Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and National Energy.
Diversification Opportunities for TechnipFMC PLC and National Energy
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TechnipFMC and National is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and National Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Energy 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 National Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Energy Services has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and National Energy go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and National Energy
Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 0.8 times more return on investment than National Energy. However, TechnipFMC PLC is 1.25 times less risky than National Energy. It trades about 0.43 of its potential returns per unit of risk. National Energy Services is currently generating about -0.2 per unit of risk. If you would invest 2,603 in TechnipFMC PLC on August 28, 2024 and sell it today you would earn a total of 461.00 from holding TechnipFMC PLC or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC PLC vs. National Energy Services
Performance |
| Timeline |
| TechnipFMC PLC |
| National Energy Services |
TechnipFMC PLC and National Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and National Energy
The main advantage of trading using opposite TechnipFMC PLC and National Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, National Energy 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 National Energy will offset losses from the drop in National Energy's long position.| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
| National Energy vs. Dawson Geophysical | National Energy vs. Mccoy Global | National Energy vs. Ranger Energy Services | National Energy 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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