Correlation Between TechnipFMC PLC and Argentum

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

By analyzing existing cross correlation between TechnipFMC PLC and Argentum 47, you can compare the effects of market volatilities on TechnipFMC PLC and Argentum 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 Argentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Argentum.

Diversification Opportunities for TechnipFMC PLC and Argentum

-0.67

Correlation Coefficient

TechnipFMC PLC  Argentum

Excellent diversification

The 3 months correlation between TechnipFMC and Argentum is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Argentum 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argentum 47 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 Argentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argentum 47 has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Argentum go up and down completely randomly.

Pair Corralation between TechnipFMC PLC and Argentum

Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 0.2 times more return on investment than Argentum. However, TechnipFMC PLC is 5.03 times less risky than Argentum. It trades about 0.13 of its potential returns per unit of risk. Argentum 47 is currently generating about -0.05 per unit of risk. If you would invest  2,896  in TechnipFMC PLC on September 10, 2024 and sell it today you would earn a total of  135.00  from holding TechnipFMC PLC or generate 4.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

TechnipFMC PLC  vs.  Argentum 47

TechnipFMC PLC

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, TechnipFMC PLC demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Argentum 47

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argentum 47 has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with TechnipFMC PLC and Argentum

The main advantage of trading using opposite TechnipFMC PLC and Argentum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC position performs unexpectedly, Argentum 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 Argentum will offset losses from the drop in Argentum's long position.

The idea behind TechnipFMC PLC and Argentum 47 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.