Correlation Between TechnipFMC Plc and United Airlines
Can any of the company-specific risk be diversified away by investing in both TechnipFMC Plc and United Airlines 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 United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC plc and United Airlines Holdings, you can compare the effects of market volatilities on TechnipFMC Plc and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC Plc and United Airlines.
Diversification Opportunities for TechnipFMC Plc and United Airlines
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TechnipFMC and United is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC plc and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of TechnipFMC Plc i.e., TechnipFMC Plc and United Airlines go up and down completely randomly.
Pair Corralation between TechnipFMC Plc and United Airlines
Assuming the 90 days trading horizon TechnipFMC plc is expected to generate 0.89 times more return on investment than United Airlines. However, TechnipFMC plc is 1.13 times less risky than United Airlines. It trades about 0.11 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.09 per unit of risk. If you would invest 6,770 in TechnipFMC plc on October 14, 2024 and sell it today you would earn a total of 12,394 from holding TechnipFMC plc or generate 183.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
TechnipFMC plc vs. United Airlines Holdings
Performance |
| Timeline |
| TechnipFMC plc |
| United Airlines Holdings |
TechnipFMC Plc and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC Plc and United Airlines
The main advantage of trading using opposite TechnipFMC Plc and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC Plc position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| TechnipFMC Plc vs. JB Hunt Transport | TechnipFMC Plc vs. Zoom Video Communications | TechnipFMC Plc vs. Pure Storage, | TechnipFMC Plc vs. Warner Music Group |
| United Airlines vs. TechnipFMC plc | United Airlines vs. Caesars Entertainment, | United Airlines vs. United States Steel | United Airlines vs. DENTSPLY SIRONA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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