Correlation Between ARROW ELECTRONICS and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both ARROW ELECTRONICS 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 ARROW ELECTRONICS and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARROW ELECTRONICS and Flutter Entertainment PLC, you can compare the effects of market volatilities on ARROW ELECTRONICS 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 ARROW ELECTRONICS with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARROW ELECTRONICS and Flutter Entertainment.
Diversification Opportunities for ARROW ELECTRONICS and Flutter Entertainment
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARROW and Flutter is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ARROW ELECTRONICS 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 ARROW ELECTRONICS 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 ARROW ELECTRONICS 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 ARROW ELECTRONICS i.e., ARROW ELECTRONICS and Flutter Entertainment go up and down completely randomly.
Pair Corralation between ARROW ELECTRONICS and Flutter Entertainment
Assuming the 90 days trading horizon ARROW ELECTRONICS is expected to generate 2.92 times less return on investment than Flutter Entertainment. But when comparing it to its historical volatility, ARROW ELECTRONICS is 1.33 times less risky than Flutter Entertainment. It trades about 0.07 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 24,500 in Flutter Entertainment PLC on November 4, 2024 and sell it today you would earn a total of 1,370 from holding Flutter Entertainment PLC or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARROW ELECTRONICS vs. Flutter Entertainment PLC
Performance |
| Timeline |
| ARROW ELECTRONICS |
| Flutter Entertainment PLC |
ARROW ELECTRONICS and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARROW ELECTRONICS and Flutter Entertainment
The main advantage of trading using opposite ARROW ELECTRONICS and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARROW ELECTRONICS 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.| ARROW ELECTRONICS vs. Xenia Hotels Resorts | ARROW ELECTRONICS vs. Playa Hotels Resorts | ARROW ELECTRONICS vs. Hyatt Hotels | ARROW ELECTRONICS vs. Renesas Electronics |
| Flutter Entertainment vs. ARROW ELECTRONICS | Flutter Entertainment vs. GRIFFIN MINING LTD | Flutter Entertainment vs. KIMBALL ELECTRONICS | Flutter Entertainment vs. Yanzhou Coal Mining |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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