Correlation Between TechnipFMC Plc and FDO INV
Can any of the company-specific risk be diversified away by investing in both TechnipFMC Plc and FDO INV 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 TechnipFMC Plc and FDO INV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC plc and FDO INV IMOB, you can compare the effects of market volatilities on TechnipFMC Plc and FDO INV 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 TechnipFMC Plc with a short position of FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC Plc and FDO INV.
Diversification Opportunities for TechnipFMC Plc and FDO INV
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TechnipFMC and FDO is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC plc and FDO INV IMOB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV IMOB and TechnipFMC Plc 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 TechnipFMC plc are associated (or correlated) with FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV IMOB has no effect on the direction of TechnipFMC Plc i.e., TechnipFMC Plc and FDO INV go up and down completely randomly.
Pair Corralation between TechnipFMC Plc and FDO INV
Assuming the 90 days trading horizon TechnipFMC plc is expected to generate 46.26 times more return on investment than FDO INV. However, TechnipFMC Plc is 46.26 times more volatile than FDO INV IMOB. It trades about 0.03 of its potential returns per unit of risk. FDO INV IMOB is currently generating about -0.23 per unit of risk. If you would invest 19,021 in TechnipFMC plc on October 12, 2024 and sell it today you would earn a total of 143.00 from holding TechnipFMC plc or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnipFMC plc vs. FDO INV IMOB
Performance |
| Timeline |
| TechnipFMC plc |
| FDO INV IMOB |
TechnipFMC Plc and FDO INV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC Plc and FDO INV
The main advantage of trading using opposite TechnipFMC Plc and FDO INV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC Plc position performs unexpectedly, FDO INV 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 FDO INV will offset losses from the drop in FDO INV's long position.| TechnipFMC Plc vs. Schlumberger Limited | TechnipFMC Plc vs. Energisa SA | TechnipFMC Plc vs. BTG Pactual Logstica | TechnipFMC Plc vs. Plano Plano Desenvolvimento |
| FDO INV vs. Energisa SA | FDO INV vs. BTG Pactual Logstica | FDO INV vs. Plano Plano Desenvolvimento | FDO INV vs. Ares Management |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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