Correlation Between Flutter Entertainment and Universal Music
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Universal Music 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 Universal Music 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 Universal Music Group, you can compare the effects of market volatilities on Flutter Entertainment and Universal Music 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 Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Universal Music.
Diversification Opportunities for Flutter Entertainment and Universal Music
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flutter and Universal is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Universal Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Music Group 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 Universal Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Music Group has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Universal Music go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Universal Music
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 2.19 times more return on investment than Universal Music. However, Flutter Entertainment is 2.19 times more volatile than Universal Music Group. It trades about 0.4 of its potential returns per unit of risk. Universal Music Group is currently generating about -0.19 per unit of risk. If you would invest 1,797,000 in Flutter Entertainment PLC on September 2, 2024 and sell it today you would earn a total of 364,000 from holding Flutter Entertainment PLC or generate 20.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Universal Music Group
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Universal Music Group |
Flutter Entertainment and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Universal Music
The main advantage of trading using opposite Flutter Entertainment and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Universal Music 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 Universal Music will offset losses from the drop in Universal Music's long position.| Flutter Entertainment vs. Viridian Therapeutics | Flutter Entertainment vs. CVR Energy | Flutter Entertainment vs. Nationwide Building Society | Flutter Entertainment vs. Dollar Tree |
| Universal Music vs. Uniper SE | Universal Music vs. Mulberry Group PLC | Universal Music vs. London Security Plc | Universal Music vs. Triad Group PLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |