Correlation Between REGAL ASIAN and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN 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 REGAL ASIAN and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and Flutter Entertainment PLC, you can compare the effects of market volatilities on REGAL ASIAN 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 REGAL ASIAN with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Flutter Entertainment.
Diversification Opportunities for REGAL ASIAN and Flutter Entertainment
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between REGAL and Flutter is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and Flutter Entertainment go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Flutter Entertainment
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Flutter Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 1.58 times less risky than Flutter Entertainment. The stock trades about -0.38 of its potential returns per unit of risk. The Flutter Entertainment PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 23,350 in Flutter Entertainment PLC on September 13, 2024 and sell it today you would earn a total of 2,930 from holding Flutter Entertainment PLC or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Flutter Entertainment PLC
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Flutter Entertainment PLC |
REGAL ASIAN and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Flutter Entertainment
The main advantage of trading using opposite REGAL ASIAN and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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.| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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