Correlation Between Intermediate Capital and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital 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 Intermediate Capital and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Capital Group and TechnipFMC PLC, you can compare the effects of market volatilities on Intermediate Capital 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 Intermediate Capital with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and TechnipFMC PLC.
Diversification Opportunities for Intermediate Capital and TechnipFMC PLC
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intermediate and TechnipFMC is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Intermediate Capital 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 Intermediate Capital Group 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 Intermediate Capital i.e., Intermediate Capital and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Intermediate Capital and TechnipFMC PLC
Assuming the 90 days trading horizon Intermediate Capital is expected to generate 1.12 times less return on investment than TechnipFMC PLC. But when comparing it to its historical volatility, Intermediate Capital Group is 1.17 times less risky than TechnipFMC PLC. It trades about 0.09 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,911 in TechnipFMC PLC on September 14, 2024 and sell it today you would earn a total of 1,020 from holding TechnipFMC PLC or generate 53.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Capital Group vs. TechnipFMC PLC
Performance |
| Timeline |
| Intermediate Capital |
| TechnipFMC PLC |
Intermediate Capital and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and TechnipFMC PLC
The main advantage of trading using opposite Intermediate Capital and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital 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.| Intermediate Capital vs. Catalyst Media Group | Intermediate Capital vs. CATLIN GROUP | Intermediate Capital vs. Tamburi Investment Partners | Intermediate Capital vs. Magnora ASA |
| TechnipFMC PLC vs. Liberty Media Corp | TechnipFMC PLC vs. Symphony Environmental Technologies | TechnipFMC PLC vs. Dentsply Sirona | TechnipFMC PLC vs. Intermediate Capital Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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