Correlation Between HYBRIGENICS and TechnipFMC PLC

Can any of the company-specific risk be diversified away by investing in both HYBRIGENICS 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 HYBRIGENICS and TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HYBRIGENICS A and TechnipFMC PLC, you can compare the effects of market volatilities on HYBRIGENICS 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 HYBRIGENICS with a short position of TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYBRIGENICS and TechnipFMC PLC.

Diversification Opportunities for HYBRIGENICS and TechnipFMC PLC

-0.42

Correlation Coefficient

HYBRIGENICS  TechnipFMC PLC

Very good diversification

The 3 months correlation between HYBRIGENICS and TechnipFMC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding HYBRIGENICS A and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC and HYBRIGENICS 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 HYBRIGENICS A 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 HYBRIGENICS i.e., HYBRIGENICS and TechnipFMC PLC go up and down completely randomly.

Pair Corralation between HYBRIGENICS and TechnipFMC PLC

Assuming the 90 days trading horizon HYBRIGENICS A is expected to under-perform the TechnipFMC PLC. In addition to that, HYBRIGENICS is 1.56 times more volatile than TechnipFMC PLC. It trades about -0.34 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  2,696  in TechnipFMC PLC on September 20, 2024 and sell it today you would earn a total of  78.00  from holding TechnipFMC PLC or generate 2.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

HYBRIGENICS A   vs.  TechnipFMC PLC

HYBRIGENICS A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HYBRIGENICS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

TechnipFMC PLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TechnipFMC PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HYBRIGENICS and TechnipFMC PLC

The main advantage of trading using opposite HYBRIGENICS and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYBRIGENICS 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.

The idea behind HYBRIGENICS A and TechnipFMC PLC 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.