Correlation Between Flutter Entertainment and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Liberty Media 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 Flutter Entertainment and Liberty Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flutter Entertainment PLC and Liberty Media Corp, you can compare the effects of market volatilities on Flutter Entertainment and Liberty Media 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 Flutter Entertainment with a short position of Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Liberty Media.
Diversification Opportunities for Flutter Entertainment and Liberty Media
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flutter and Liberty is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Liberty Media Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media Corp and Flutter Entertainment 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 Flutter Entertainment PLC are associated (or correlated) with Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media Corp has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Liberty Media go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Liberty Media
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.97 times more return on investment than Liberty Media. However, Flutter Entertainment PLC is 1.03 times less risky than Liberty Media. It trades about 0.07 of its potential returns per unit of risk. Liberty Media Corp is currently generating about 0.05 per unit of risk. If you would invest 1,197,000 in Flutter Entertainment PLC on August 30, 2024 and sell it today you would earn a total of 968,000 from holding Flutter Entertainment PLC or generate 80.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.14% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Liberty Media Corp
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Liberty Media Corp |
Flutter Entertainment and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Liberty Media
The main advantage of trading using opposite Flutter Entertainment and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| Flutter Entertainment vs. Ondine Biomedical | Flutter Entertainment vs. Europa Metals | Flutter Entertainment vs. Lendinvest PLC | Flutter Entertainment vs. Neometals |
| Liberty Media vs. Lendinvest PLC | Liberty Media vs. Neometals | Liberty Media vs. Albion Technology General | Liberty Media vs. Jupiter Fund Management |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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