Correlation Between Eisai and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both Eisai 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 Eisai and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eisai Co and Flutter Entertainment PLC, you can compare the effects of market volatilities on Eisai 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 Eisai with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eisai and Flutter Entertainment.
Diversification Opportunities for Eisai and Flutter Entertainment
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eisai and Flutter is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Eisai Co 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 Eisai 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 Eisai Co 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 Eisai i.e., Eisai and Flutter Entertainment go up and down completely randomly.
Pair Corralation between Eisai and Flutter Entertainment
Assuming the 90 days horizon Eisai is expected to generate 12.29 times less return on investment than Flutter Entertainment. In addition to that, Eisai is 1.23 times more volatile than Flutter Entertainment PLC. It trades about 0.01 of its total potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.11 per unit of volatility. If you would invest 24,300 in Flutter Entertainment PLC on November 9, 2024 and sell it today you would earn a total of 1,010 from holding Flutter Entertainment PLC or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eisai Co vs. Flutter Entertainment PLC
Performance |
| Timeline |
| Eisai |
| Flutter Entertainment PLC |
Eisai and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eisai and Flutter Entertainment
The main advantage of trading using opposite Eisai and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eisai 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.| Eisai vs. GUARDANT HEALTH CL | Eisai vs. Siemens Healthineers AG | Eisai vs. T MOBILE US | Eisai vs. OPKO HEALTH |
| Flutter Entertainment vs. Sekisui Chemical Co | Flutter Entertainment vs. Mitsubishi Gas Chemical | Flutter Entertainment vs. SALESFORCE INC CDR | Flutter Entertainment vs. TIANDE CHEMICAL |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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