Correlation Between Flutter Entertainment and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on Flutter Entertainment and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and XLMedia PLC.
Diversification Opportunities for Flutter Entertainment and XLMedia PLC
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flutter and XLMedia is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and XLMedia PLC go up and down completely randomly.
Pair Corralation between Flutter Entertainment and XLMedia PLC
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.7 times more return on investment than XLMedia PLC. However, Flutter Entertainment PLC is 1.44 times less risky than XLMedia PLC. It trades about 0.15 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.03 per unit of risk. If you would invest 1,481,500 in Flutter Entertainment PLC on August 26, 2024 and sell it today you would earn a total of 676,500 from holding Flutter Entertainment PLC or generate 45.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. XLMedia PLC
Performance |
| Timeline |
| Flutter Entertainment PLC |
| XLMedia PLC |
Flutter Entertainment and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and XLMedia PLC
The main advantage of trading using opposite Flutter Entertainment and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Flutter Entertainment vs. Direct Line Insurance | Flutter Entertainment vs. European Metals Holdings | Flutter Entertainment vs. Europa Metals | Flutter Entertainment vs. Sparebank 1 SR |
| XLMedia PLC vs. Samsung Electronics Co | XLMedia PLC vs. Samsung Electronics Co | XLMedia PLC vs. Hyundai Motor | XLMedia PLC vs. Toyota Motor Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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