Correlation Between Flutter Entertainment and Lincoln National
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Lincoln National 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 Lincoln National 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 Lincoln National, you can compare the effects of market volatilities on Flutter Entertainment and Lincoln National 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 Lincoln National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Lincoln National.
Diversification Opportunities for Flutter Entertainment and Lincoln National
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flutter and Lincoln is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Lincoln National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln National 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 Lincoln National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln National has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Lincoln National go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Lincoln National
Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 1.64 times more return on investment than Lincoln National. However, Flutter Entertainment is 1.64 times more volatile than Lincoln National. It trades about 0.14 of its potential returns per unit of risk. Lincoln National is currently generating about 0.03 per unit of risk. If you would invest 26,103 in Flutter Entertainment plc on October 24, 2024 and sell it today you would earn a total of 810.00 from holding Flutter Entertainment plc or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment plc vs. Lincoln National
Performance |
| Timeline |
| Flutter Entertainment plc |
| Lincoln National |
Flutter Entertainment and Lincoln National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Lincoln National
The main advantage of trading using opposite Flutter Entertainment and Lincoln National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Lincoln National 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 Lincoln National will offset losses from the drop in Lincoln National's long position.| Flutter Entertainment vs. Bankwell Financial Group | Flutter Entertainment vs. Barings BDC | Flutter Entertainment vs. Glacier Bancorp | Flutter Entertainment vs. PPG Industries |
| Lincoln National vs. Marimaca Copper Corp | Lincoln National vs. Emerson Electric | Lincoln National vs. Dave Busters Entertainment | Lincoln National vs. Flutter Entertainment plc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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