Correlation Between FMC and Linde Plc

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

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

Diversification Opportunities for FMC and Linde Plc

0.77

Correlation Coefficient

FMC  Linde Plc

Poor diversification

The 3 months correlation between FMC and Linde is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp. and Linde plc Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde plc Ordinary and FMC 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 FMC Corporation are associated (or correlated) with Linde Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde plc Ordinary has no effect on the direction of FMC i.e., FMC and Linde Plc go up and down completely randomly.

Pair Corralation between FMC and Linde Plc

Considering the 90-day investment horizon FMC Corporation is expected to generate 2.66 times more return on investment than Linde Plc. However, FMC is 2.66 times more volatile than Linde plc Ordinary. It trades about 0.08 of its potential returns per unit of risk. Linde plc Ordinary is currently generating about 0.03 per unit of risk. If you would invest  3,727  in FMC Corporation on May 2, 2025 and sell it today you would earn a total of  406.00  from holding FMC Corporation or generate 10.89% return on investment over 90 days.

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

FMC Corp.  vs.  Linde plc Ordinary

FMC Corporation

Risk-Adjusted Performance

Modest

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

Linde plc Ordinary

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Linde plc Ordinary are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Linde Plc is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FMC and Linde Plc

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

The idea behind FMC Corporation and Linde plc Ordinary 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.