Correlation Between TechnipFMC Plc and Boeing

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

Diversification Opportunities for TechnipFMC Plc and Boeing

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between TechnipFMC and Boeing is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC Plc and Boeing Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing Company 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 Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing Company has no effect on the direction of TechnipFMC Plc i.e., TechnipFMC Plc and Boeing go up and down completely randomly.

Pair Corralation between TechnipFMC Plc and Boeing

Considering the 90-day investment horizon TechnipFMC Plc is expected to generate 1.92 times more return on investment than Boeing. However, TechnipFMC Plc is 1.92 times more volatile than Boeing Company. It trades about 0.36 of its potential returns per unit of risk. Boeing Company is currently generating about 0.15 per unit of risk. If you would invest  633.00  in TechnipFMC Plc on May 21, 2022 and sell it today you would earn a total of  219.00  from holding TechnipFMC Plc or generate 34.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

TechnipFMC Plc  vs.  Boeing Company

 Performance (%) 
       Timeline  
TechnipFMC Plc 
TechnipFMC Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC Plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, TechnipFMC Plc may actually be approaching a critical reversion point that can send shares even higher in September 2022.

TechnipFMC Price Channel

Boeing Company 
Boeing Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Company are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Boeing sustained solid returns over the last few months and may actually be approaching a breakup point.

Boeing Price Channel

TechnipFMC Plc and Boeing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TechnipFMC Plc and Boeing

The main advantage of trading using opposite TechnipFMC Plc and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC Plc position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.
The idea behind TechnipFMC Plc and Boeing Company 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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