Correlation Between GreenX Metals and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and TechnipFMC PLC, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and TechnipFMC PLC.
Diversification Opportunities for GreenX Metals and TechnipFMC PLC
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GreenX and TechnipFMC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between GreenX Metals and TechnipFMC PLC
Assuming the 90 days trading horizon GreenX Metals is expected to generate 1.94 times more return on investment than TechnipFMC PLC. However, GreenX Metals is 1.94 times more volatile than TechnipFMC PLC. It trades about 0.32 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about -0.19 per unit of risk. If you would invest 3,550 in GreenX Metals on November 6, 2024 and sell it today you would earn a total of 500.00 from holding GreenX Metals or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. TechnipFMC PLC
Performance |
| Timeline |
| GreenX Metals |
| TechnipFMC PLC |
GreenX Metals and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and TechnipFMC PLC
The main advantage of trading using opposite GreenX Metals and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.| GreenX Metals vs. Dalata Hotel Group | GreenX Metals vs. Alfa Financial Software | GreenX Metals vs. Public Storage | GreenX Metals vs. Scandic Hotels Group |
| TechnipFMC PLC vs. Batm Advanced Communications | TechnipFMC PLC vs. Morgan Advanced Materials | TechnipFMC PLC vs. Mobius Investment Trust | TechnipFMC PLC vs. Edinburgh Investment Trust |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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