Correlation Between Rockfire Resources and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Rockfire Resources 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 Rockfire Resources and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockfire Resources plc and TechnipFMC PLC, you can compare the effects of market volatilities on Rockfire Resources 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 Rockfire Resources with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockfire Resources and TechnipFMC PLC.
Diversification Opportunities for Rockfire Resources and TechnipFMC PLC
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rockfire and TechnipFMC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Rockfire Resources plc and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Rockfire Resources 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 Rockfire Resources plc 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 Rockfire Resources i.e., Rockfire Resources and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Rockfire Resources and TechnipFMC PLC
Assuming the 90 days trading horizon Rockfire Resources is expected to generate 8.96 times less return on investment than TechnipFMC PLC. In addition to that, Rockfire Resources is 1.15 times more volatile than TechnipFMC PLC. It trades about 0.01 of its total potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.08 per unit of volatility. If you would invest 655.00 in TechnipFMC PLC on September 5, 2024 and sell it today you would earn a total of 2,350 from holding TechnipFMC PLC or generate 358.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.95% |
| Values | Daily Returns |
Rockfire Resources plc vs. TechnipFMC PLC
Performance |
| Timeline |
| Rockfire Resources plc |
| TechnipFMC PLC |
Rockfire Resources and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockfire Resources and TechnipFMC PLC
The main advantage of trading using opposite Rockfire Resources and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockfire Resources 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.| Rockfire Resources vs. TechnipFMC PLC | Rockfire Resources vs. Made Tech Group | Rockfire Resources vs. Microchip Technology | Rockfire Resources vs. DXC Technology Co |
| TechnipFMC PLC vs. Zoom Video Communications | TechnipFMC PLC vs. Enbridge | TechnipFMC PLC vs. Endo International PLC | TechnipFMC PLC vs. Reckitt Benckiser 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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