Correlation Between PennantPark Investment and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment 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 PennantPark Investment and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Flutter Entertainment PLC, you can compare the effects of market volatilities on PennantPark Investment 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 PennantPark Investment with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Flutter Entertainment.
Diversification Opportunities for PennantPark Investment and Flutter Entertainment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and Flutter is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment i.e., PennantPark Investment and Flutter Entertainment go up and down completely randomly.
Pair Corralation between PennantPark Investment and Flutter Entertainment
Assuming the 90 days horizon PennantPark Investment is expected to generate 4.59 times less return on investment than Flutter Entertainment. But when comparing it to its historical volatility, PennantPark Investment is 1.3 times less risky than Flutter Entertainment. It trades about 0.04 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 24,660 in Flutter Entertainment PLC on September 14, 2024 and sell it today you would earn a total of 1,620 from holding Flutter Entertainment PLC or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Flutter Entertainment PLC
Performance |
| Timeline |
| PennantPark Investment |
| Flutter Entertainment PLC |
PennantPark Investment and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Flutter Entertainment
The main advantage of trading using opposite PennantPark Investment and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment 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.| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. SIVERS SEMICONDUCTORS AB |
| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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