Correlation Between TechnipFMC PLC and Precision Drilling

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

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

Diversification Opportunities for TechnipFMC PLC and Precision Drilling

0.8

Correlation Coefficient

TechnipFMC PLC  Precision Drilling

Very poor diversification

The 3 months correlation between TechnipFMC and Precision is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and Precision Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision Drilling 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 Precision Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision Drilling has no effect on the direction of TechnipFMC PLC i.e., TechnipFMC PLC and Precision Drilling go up and down completely randomly.

Pair Corralation between TechnipFMC PLC and Precision Drilling

Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 1.29 times less return on investment than Precision Drilling. In addition to that, TechnipFMC PLC is 1.12 times more volatile than Precision Drilling. It trades about 0.08 of its total potential returns per unit of risk. Precision Drilling is currently generating about 0.12 per unit of volatility. If you would invest  4,966  in Precision Drilling on July 5, 2025 and sell it today you would earn a total of  730.00  from holding Precision Drilling or generate 14.7% return on investment over 90 days.

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

TechnipFMC PLC  vs.  Precision Drilling

TechnipFMC PLC

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in TechnipFMC PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, TechnipFMC PLC may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Precision Drilling

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Precision Drilling are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Precision Drilling unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TechnipFMC PLC and Precision Drilling

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

The idea behind TechnipFMC PLC and Precision Drilling 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.