Correlation Between Flutter Entertainment and Herald Investment
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Herald Investment 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 Herald Investment 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 Herald Investment Trust, you can compare the effects of market volatilities on Flutter Entertainment and Herald Investment 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 Herald Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Herald Investment.
Diversification Opportunities for Flutter Entertainment and Herald Investment
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Flutter and Herald is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Herald Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herald Investment Trust 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 Herald Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herald Investment Trust has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Herald Investment go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Herald Investment
Assuming the 90 days trading horizon Flutter Entertainment is expected to generate 3.13 times less return on investment than Herald Investment. In addition to that, Flutter Entertainment is 1.43 times more volatile than Herald Investment Trust. It trades about 0.16 of its total potential returns per unit of risk. Herald Investment Trust is currently generating about 0.71 per unit of volatility. If you would invest 218,000 in Herald Investment Trust on September 15, 2024 and sell it today you would earn a total of 31,500 from holding Herald Investment Trust or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Herald Investment Trust
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Herald Investment Trust |
Flutter Entertainment and Herald Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Herald Investment
The main advantage of trading using opposite Flutter Entertainment and Herald Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Herald Investment 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 Herald Investment will offset losses from the drop in Herald Investment's long position.| Flutter Entertainment vs. Berkshire Hathaway | Flutter Entertainment vs. Hyundai Motor | Flutter Entertainment vs. Samsung Electronics Co | Flutter Entertainment vs. Samsung Electronics Co |
| Herald Investment vs. Flutter Entertainment PLC | Herald Investment vs. Schweiter Technologies AG | Herald Investment vs. BioNTech SE | Herald Investment vs. Darden Restaurants |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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