Correlation Between Flutter Entertainment and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Vodafone Group 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 Vodafone Group 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 Vodafone Group PLC, you can compare the effects of market volatilities on Flutter Entertainment and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Vodafone Group.
Diversification Opportunities for Flutter Entertainment and Vodafone Group
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Flutter and Vodafone is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Vodafone Group go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Vodafone Group
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.35 times more return on investment than Vodafone Group. However, Flutter Entertainment is 1.35 times more volatile than Vodafone Group PLC. It trades about 0.1 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about 0.02 per unit of risk. If you would invest 1,620,000 in Flutter Entertainment PLC on September 3, 2024 and sell it today you would earn a total of 541,000 from holding Flutter Entertainment PLC or generate 33.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.67% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Vodafone Group PLC
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Vodafone Group PLC |
Flutter Entertainment and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Vodafone Group
The main advantage of trading using opposite Flutter Entertainment and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Flutter Entertainment vs. Rockfire Resources plc | Flutter Entertainment vs. Tlou Energy | Flutter Entertainment vs. Falcon Oil Gas | Flutter Entertainment vs. Helium One Global |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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