Correlation Between TechnipFMC PLC and Marcus

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Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Marcus 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 Marcus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Marcus, you can compare the effects of market volatilities on TechnipFMC PLC and Marcus 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 Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Marcus.

Diversification Opportunities for TechnipFMC PLC and Marcus

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between TechnipFMC and Marcus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Marcus go up and down completely randomly.

Pair Corralation between TechnipFMC PLC and Marcus

Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 1.82 times more return on investment than Marcus. However, TechnipFMC PLC is 1.82 times more volatile than Marcus. It trades about 0.1 of its potential returns per unit of risk. Marcus is currently generating about -0.01 per unit of risk. If you would invest  747.00  in TechnipFMC PLC on December 30, 2023 and sell it today you would earn a total of  1,764  from holding TechnipFMC PLC or generate 236.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

TechnipFMC PLC  vs.  Marcus

 Performance 
       Timeline  
TechnipFMC PLC 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, TechnipFMC PLC demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Marcus 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Marcus is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

TechnipFMC PLC and Marcus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TechnipFMC PLC and Marcus

The main advantage of trading using opposite TechnipFMC PLC and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.
The idea behind TechnipFMC PLC and Marcus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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