Correlation Between Melnick Even and TechnipFMC Plc

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

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

Diversification Opportunities for Melnick Even and TechnipFMC Plc

0.52

Correlation Coefficient

Melnick Even  TechnipFMC Plc

Very weak diversification

The 3 months correlation between Melnick and TechnipFMC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Melnick Even Desenvolvimento and TechnipFMC plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC plc and Melnick Even 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 Melnick Even Desenvolvimento 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 Melnick Even i.e., Melnick Even and TechnipFMC Plc go up and down completely randomly.

Pair Corralation between Melnick Even and TechnipFMC Plc

Assuming the 90 days trading horizon Melnick Even Desenvolvimento is expected to generate 2.05 times more return on investment than TechnipFMC Plc. However, Melnick Even is 2.05 times more volatile than TechnipFMC plc. It trades about 0.07 of its potential returns per unit of risk. TechnipFMC plc is currently generating about 0.03 per unit of risk. If you would invest  275.00  in Melnick Even Desenvolvimento on March 25, 2025 and sell it today you would earn a total of  54.00  from holding Melnick Even Desenvolvimento or generate 19.64% return on investment over 90 days.

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

Melnick Even Desenvolvimento  vs.  TechnipFMC plc

Melnick Even Desenvo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Melnick Even Desenvolvimento are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Melnick Even may actually be approaching a critical reversion point that can send shares even higher in July 2025.

TechnipFMC plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, TechnipFMC Plc sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Melnick Even and TechnipFMC Plc

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

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 the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.