Correlation Between TechnipFMC PLC and ChampionX

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

By analyzing existing cross correlation between TechnipFMC PLC and ChampionX, you can compare the effects of market volatilities on TechnipFMC PLC and ChampionX 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 ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and ChampionX.

Diversification Opportunities for TechnipFMC PLC and ChampionX

0.47

Correlation Coefficient

TechnipFMC PLC  ChampionX

Very weak diversification

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

Pair Corralation between TechnipFMC PLC and ChampionX

Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 1.12 times more return on investment than ChampionX. However, TechnipFMC PLC is 1.12 times more volatile than ChampionX. It trades about 0.15 of its potential returns per unit of risk. ChampionX is currently generating about 0.06 per unit of risk. If you would invest  2,921  in TechnipFMC PLC on May 5, 2025 and sell it today you would earn a total of  611.00  from holding TechnipFMC PLC or generate 20.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	79.37%
Values	Daily Returns

TechnipFMC PLC  vs.  ChampionX

TechnipFMC PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, TechnipFMC PLC demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ChampionX

Risk-Adjusted Performance

Modest

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly conflicting technical indicators, ChampionX may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with TechnipFMC PLC and ChampionX

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

The idea behind TechnipFMC PLC and ChampionX 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.