Correlation Between AMG Advanced and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Flutter Entertainment 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 AMG Advanced and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Flutter Entertainment PLC, you can compare the effects of market volatilities on AMG Advanced and Flutter Entertainment 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 AMG Advanced with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Flutter Entertainment.
Diversification Opportunities for AMG Advanced and Flutter Entertainment
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMG and Flutter is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Flutter Entertainment PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment PLC and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment PLC has no effect on the direction of AMG Advanced i.e., AMG Advanced and Flutter Entertainment go up and down completely randomly.
Pair Corralation between AMG Advanced and Flutter Entertainment
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Flutter Entertainment. In addition to that, AMG Advanced is 1.2 times more volatile than Flutter Entertainment PLC. It trades about -0.06 of its total potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.07 per unit of volatility. If you would invest 1,198,500 in Flutter Entertainment PLC on September 2, 2024 and sell it today you would earn a total of 962,500 from holding Flutter Entertainment PLC or generate 80.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Flutter Entertainment PLC
Performance |
| Timeline |
| AMG Advanced Metallu |
| Flutter Entertainment PLC |
AMG Advanced and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Flutter Entertainment
The main advantage of trading using opposite AMG Advanced and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Flutter Entertainment 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 Flutter Entertainment will offset losses from the drop in Flutter Entertainment's long position.| AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced vs. Triad Group PLC |
| Flutter Entertainment vs. Viridian Therapeutics | Flutter Entertainment vs. CVR Energy | Flutter Entertainment vs. Nationwide Building Society | Flutter Entertainment vs. Dollar Tree |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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