Correlation Between Flutter Entertainment and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Bank of Ireland 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 Bank of Ireland 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 Bank of Ireland, you can compare the effects of market volatilities on Flutter Entertainment and Bank of Ireland 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 Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Bank of Ireland.
Diversification Opportunities for Flutter Entertainment and Bank of Ireland
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flutter and Bank is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland 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 Bank of Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Bank of Ireland go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Bank of Ireland
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.91 times more return on investment than Bank of Ireland. However, Flutter Entertainment PLC is 1.1 times less risky than Bank of Ireland. It trades about 0.07 of its potential returns per unit of risk. Bank of Ireland is currently generating about 0.03 per unit of risk. If you would invest 1,186,500 in Flutter Entertainment PLC on August 29, 2024 and sell it today you would earn a total of 1,010,500 from holding Flutter Entertainment PLC or generate 85.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Bank of Ireland
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Bank of Ireland |
Flutter Entertainment and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Bank of Ireland
The main advantage of trading using opposite Flutter Entertainment and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Bank of Ireland 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 Bank of Ireland will offset losses from the drop in Bank of Ireland's long position.| Flutter Entertainment vs. Ondine Biomedical | Flutter Entertainment vs. Europa Metals | Flutter Entertainment vs. Lendinvest PLC | Flutter Entertainment vs. Neometals |
| Bank of Ireland vs. Toyota Motor Corp | Bank of Ireland vs. CATCo Reinsurance Opportunities | Bank of Ireland vs. Lendinvest PLC | Bank of Ireland vs. Neometals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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