Correlation Between Oceaneering International and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Oceaneering International 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 Oceaneering International and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceaneering International and TechnipFMC PLC, you can compare the effects of market volatilities on Oceaneering International 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 Oceaneering International with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceaneering International and TechnipFMC PLC.
Diversification Opportunities for Oceaneering International and TechnipFMC PLC
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Oceaneering and TechnipFMC is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Oceaneering International and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Oceaneering International 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 Oceaneering International 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 Oceaneering International i.e., Oceaneering International and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Oceaneering International and TechnipFMC PLC
Considering the 90-day investment horizon Oceaneering International is expected to generate 1.04 times more return on investment than TechnipFMC PLC. However, Oceaneering International is 1.04 times more volatile than TechnipFMC PLC. It trades about -0.12 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about -0.19 per unit of risk. If you would invest 2,668 in Oceaneering International on November 18, 2024 and sell it today you would lose (120.00) from holding Oceaneering International or give up 4.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oceaneering International vs. TechnipFMC PLC
Performance |
| Timeline |
| Oceaneering International |
| TechnipFMC PLC |
Oceaneering International and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceaneering International and TechnipFMC PLC
The main advantage of trading using opposite Oceaneering International and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceaneering International 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.| Oceaneering International vs. Helix Energy Solutions | Oceaneering International vs. RPC Inc | Oceaneering International vs. Oil States International | Oceaneering International vs. ChampionX |
| TechnipFMC PLC vs. Oceaneering International | TechnipFMC PLC vs. NOV Inc | TechnipFMC PLC vs. Flowserve | TechnipFMC PLC vs. Core Laboratories NV |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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