Correlation Between Flutter Entertainment and Metro Bank
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Metro Bank 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 Metro Bank 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 Metro Bank PLC, you can compare the effects of market volatilities on Flutter Entertainment and Metro Bank 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 Metro Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Metro Bank.
Diversification Opportunities for Flutter Entertainment and Metro Bank
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Flutter and Metro is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Metro Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Bank 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 Metro Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Bank PLC has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Metro Bank go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Metro Bank
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to under-perform the Metro Bank. But the stock apears to be less risky and, when comparing its historical volatility, Flutter Entertainment PLC is 2.15 times less risky than Metro Bank. The stock trades about -0.03 of its potential returns per unit of risk. The Metro Bank PLC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 9,100 in Metro Bank PLC on October 17, 2024 and sell it today you would lose (70.00) from holding Metro Bank PLC or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Metro Bank PLC
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Metro Bank PLC |
Flutter Entertainment and Metro Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Metro Bank
The main advantage of trading using opposite Flutter Entertainment and Metro Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Metro Bank 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 Metro Bank will offset losses from the drop in Metro Bank's long position.| Flutter Entertainment vs. St Galler Kantonalbank | Flutter Entertainment vs. Bankers Investment Trust | Flutter Entertainment vs. Air Products Chemicals | Flutter Entertainment vs. Aeorema Communications Plc |
| Metro Bank vs. UNIQA Insurance Group | Metro Bank vs. Darden Restaurants | Metro Bank vs. Flutter Entertainment PLC | Metro Bank vs. Hollywood Bowl Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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