Correlation Between GP Investments and TechnipFMC Plc
Can any of the company-specific risk be diversified away by investing in both GP Investments and TechnipFMC Plc 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 GP Investments and TechnipFMC Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and TechnipFMC plc, you can compare the effects of market volatilities on GP Investments and TechnipFMC Plc 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 GP Investments with a short position of TechnipFMC Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and TechnipFMC Plc.
Diversification Opportunities for GP Investments and TechnipFMC Plc
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GPIV33 and TechnipFMC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and TechnipFMC plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC plc and GP Investments 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 GP Investments are associated (or correlated) with TechnipFMC Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnipFMC plc has no effect on the direction of GP Investments i.e., GP Investments and TechnipFMC Plc go up and down completely randomly.
Pair Corralation between GP Investments and TechnipFMC Plc
Assuming the 90 days trading horizon GP Investments is expected to generate 2.03 times more return on investment than TechnipFMC Plc. However, GP Investments is 2.03 times more volatile than TechnipFMC plc. It trades about -0.07 of its potential returns per unit of risk. TechnipFMC plc is currently generating about -0.15 per unit of risk. If you would invest 404.00 in GP Investments on November 5, 2024 and sell it today you would lose (18.00) from holding GP Investments or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GP Investments vs. TechnipFMC plc
Performance |
| Timeline |
| GP Investments |
| TechnipFMC plc |
GP Investments and TechnipFMC Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and TechnipFMC Plc
The main advantage of trading using opposite GP Investments and TechnipFMC Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, TechnipFMC Plc 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 TechnipFMC Plc will offset losses from the drop in TechnipFMC Plc's long position.| GP Investments vs. BlackRock | GP Investments vs. Brookfield | GP Investments vs. The Bank of | GP Investments vs. Ameriprise Financial |
| TechnipFMC Plc vs. LPL Financial Holdings | TechnipFMC Plc vs. JB Hunt Transport | TechnipFMC Plc vs. Zebra Technologies | TechnipFMC Plc vs. GX AI TECH |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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