Correlation Between Allegheny Technologies and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies 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 Allegheny Technologies and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegheny Technologies Incorporated and Flutter Entertainment plc, you can compare the effects of market volatilities on Allegheny Technologies 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 Allegheny Technologies with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Flutter Entertainment.
Diversification Opportunities for Allegheny Technologies and Flutter Entertainment
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Allegheny and Flutter is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo 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 Allegheny Technologies 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 Allegheny Technologies Incorporated 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 Allegheny Technologies i.e., Allegheny Technologies and Flutter Entertainment go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Flutter Entertainment
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 1.63 times more return on investment than Flutter Entertainment. However, Allegheny Technologies is 1.63 times more volatile than Flutter Entertainment plc. It trades about 0.13 of its potential returns per unit of risk. Flutter Entertainment plc is currently generating about 0.15 per unit of risk. If you would invest 5,504 in Allegheny Technologies Incorporated on November 1, 2024 and sell it today you would earn a total of 275.00 from holding Allegheny Technologies Incorporated or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Flutter Entertainment plc
Performance |
| Timeline |
| Allegheny Technologies |
| Flutter Entertainment plc |
Allegheny Technologies and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Flutter Entertainment
The main advantage of trading using opposite Allegheny Technologies and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies 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.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| Flutter Entertainment vs. Sonos Inc | Flutter Entertainment vs. Allegheny Technologies Incorporated | Flutter Entertainment vs. Mattel Inc | Flutter Entertainment vs. ArcelorMittal SA ADR |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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