Correlation Between Flutter Entertainment and Arhaus
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Arhaus 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 Arhaus 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 Arhaus Inc, you can compare the effects of market volatilities on Flutter Entertainment and Arhaus 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 Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Arhaus.
Diversification Opportunities for Flutter Entertainment and Arhaus
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flutter and Arhaus is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc 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 Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Arhaus go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Arhaus
Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 0.69 times more return on investment than Arhaus. However, Flutter Entertainment plc is 1.46 times less risky than Arhaus. It trades about 0.05 of its potential returns per unit of risk. Arhaus Inc is currently generating about 0.01 per unit of risk. If you would invest 15,302 in Flutter Entertainment plc on October 12, 2024 and sell it today you would earn a total of 10,286 from holding Flutter Entertainment plc or generate 67.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment plc vs. Arhaus Inc
Performance |
| Timeline |
| Flutter Entertainment plc |
| Arhaus Inc |
Flutter Entertainment and Arhaus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Arhaus
The main advantage of trading using opposite Flutter Entertainment and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' long position.| Flutter Entertainment vs. NL Industries | Flutter Entertainment vs. Chemours Co | Flutter Entertainment vs. Ardelyx | Flutter Entertainment vs. Albemarle |
| Arhaus vs. Floor Decor Holdings | Arhaus vs. Live Ventures | Arhaus vs. Haverty Furniture Companies | Arhaus vs. Haverty Furniture Companies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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