Correlation Between Stewart Information and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Stewart Information 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 Stewart Information and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stewart Information Services and TechnipFMC PLC, you can compare the effects of market volatilities on Stewart Information 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 Stewart Information with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and TechnipFMC PLC.
Diversification Opportunities for Stewart Information and TechnipFMC PLC
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stewart and TechnipFMC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and Stewart Information 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 Stewart Information Services 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 Stewart Information i.e., Stewart Information and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Stewart Information and TechnipFMC PLC
Assuming the 90 days horizon Stewart Information is expected to generate 3.93 times less return on investment than TechnipFMC PLC. But when comparing it to its historical volatility, Stewart Information Services is 1.02 times less risky than TechnipFMC PLC. It trades about 0.07 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,334 in TechnipFMC PLC on August 29, 2024 and sell it today you would earn a total of 599.00 from holding TechnipFMC PLC or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stewart Information Services vs. TechnipFMC PLC
Performance |
| Timeline |
| Stewart Information |
| TechnipFMC PLC |
Stewart Information and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Information and TechnipFMC PLC
The main advantage of trading using opposite Stewart Information and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Information 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.| Stewart Information vs. PICC Property and | Stewart Information vs. QBE Insurance Group | Stewart Information vs. Superior Plus Corp | Stewart Information vs. SIVERS SEMICONDUCTORS AB |
| TechnipFMC PLC vs. Data3 Limited | TechnipFMC PLC vs. Stewart Information Services | TechnipFMC PLC vs. Jacquet Metal Service | TechnipFMC PLC vs. Science Applications International |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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