Correlation Between Beijing MediaLimited and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both Beijing MediaLimited 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 Beijing MediaLimited and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Flutter Entertainment PLC, you can compare the effects of market volatilities on Beijing MediaLimited 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 Beijing MediaLimited with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing MediaLimited and Flutter Entertainment.
Diversification Opportunities for Beijing MediaLimited and Flutter Entertainment
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Beijing and Flutter is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media 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 Beijing MediaLimited 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 Beijing Media 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 Beijing MediaLimited i.e., Beijing MediaLimited and Flutter Entertainment go up and down completely randomly.
Pair Corralation between Beijing MediaLimited and Flutter Entertainment
Assuming the 90 days horizon Beijing Media is expected to under-perform the Flutter Entertainment. In addition to that, Beijing MediaLimited is 1.61 times more volatile than Flutter Entertainment PLC. It trades about -0.18 of its total potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.38 per unit of volatility. If you would invest 21,350 in Flutter Entertainment PLC on September 2, 2024 and sell it today you would earn a total of 4,230 from holding Flutter Entertainment PLC or generate 19.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Media vs. Flutter Entertainment PLC
Performance |
| Timeline |
| Beijing MediaLimited |
| Flutter Entertainment PLC |
Beijing MediaLimited and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing MediaLimited and Flutter Entertainment
The main advantage of trading using opposite Beijing MediaLimited and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing MediaLimited 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.| Beijing MediaLimited vs. Haverty Furniture Companies | Beijing MediaLimited vs. MI Homes | Beijing MediaLimited vs. Addus HomeCare | Beijing MediaLimited vs. MHP Hotel AG |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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