Correlation Between TechnipFMC PLC and Singapore Airlines

Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC and Singapore 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 Singapore 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 Singapore Airlines, you can compare the effects of market volatilities on TechnipFMC PLC and Singapore 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 Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Singapore Airlines.

Diversification Opportunities for TechnipFMC PLC and Singapore Airlines

-0.47

Correlation Coefficient

TechnipFMC PLC  Singapore Airlines

Very good diversification

The 3 months correlation between TechnipFMC and Singapore is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Singapore Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines 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 Singapore Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Airlines has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Singapore Airlines go up and down completely randomly.

Pair Corralation between TechnipFMC PLC and Singapore Airlines

Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 0.69 times more return on investment than Singapore Airlines. However, TechnipFMC PLC is 1.44 times less risky than Singapore Airlines. It trades about 0.07 of its potential returns per unit of risk. Singapore Airlines is currently generating about 0.04 per unit of risk. If you would invest  2,890  in TechnipFMC PLC on December 30, 2024 and sell it today you would earn a total of  228.00  from holding TechnipFMC PLC or generate 7.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.94%
Values	Daily Returns

TechnipFMC PLC  vs.  Singapore Airlines

TechnipFMC PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, TechnipFMC PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Singapore Airlines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Airlines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Singapore Airlines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TechnipFMC PLC and Singapore Airlines

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

The idea behind TechnipFMC PLC and Singapore Airlines 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 Anywhere module to track or share privately all of your investments from the convenience of any device.