Correlation Between TechnipFMC Plc and CSI Compressco

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

Diversification Opportunities for TechnipFMC Plc and CSI Compressco

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between TechnipFMC and CSI Compressco is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC Plc and CSI Compressco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSI Compressco 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 CSI Compressco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSI Compressco has no effect on the direction of TechnipFMC Plc i.e., TechnipFMC Plc and CSI Compressco go up and down completely randomly.

Pair Corralation between TechnipFMC Plc and CSI Compressco

Considering the 90-day investment horizon TechnipFMC Plc is expected to generate 0.94 times more return on investment than CSI Compressco. However, TechnipFMC Plc is 1.06 times less risky than CSI Compressco. It trades about 0.04 of its potential returns per unit of risk. CSI Compressco is currently generating about 0.03 per unit of risk. If you would invest  527.00  in TechnipFMC Plc on June 30, 2022 and sell it today you would earn a total of  316.00  from holding TechnipFMC Plc or generate 59.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

TechnipFMC Plc  vs.  CSI Compressco

 Performance (%) 
       Timeline  
TechnipFMC Plc 
TechnipFMC Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC Plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, TechnipFMC Plc reported solid returns over the last few months and may actually be approaching a breakup point.

TechnipFMC Price Channel

CSI Compressco 
CSI Compressco Performance
0 of 100
Over the last 90 days CSI Compressco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm insiders.

CSI Compressco Price Channel

TechnipFMC Plc and CSI Compressco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TechnipFMC Plc and CSI Compressco

The main advantage of trading using opposite TechnipFMC Plc and CSI Compressco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC Plc position performs unexpectedly, CSI Compressco 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 CSI Compressco will offset losses from the drop in CSI Compressco's long position.
TechnipFMC Plc vs. Kibush Capital Corp
The idea behind TechnipFMC Plc and CSI Compressco 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.
CSI Compressco vs. Kibush Capital Corp
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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