Correlation Between Flutter Entertainment and Sonos
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Sonos 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 Sonos 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 Sonos Inc, you can compare the effects of market volatilities on Flutter Entertainment and Sonos 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 Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Sonos.
Diversification Opportunities for Flutter Entertainment and Sonos
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flutter and Sonos is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos 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 Sonos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonos Inc has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Sonos go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Sonos
Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 0.87 times more return on investment than Sonos. However, Flutter Entertainment plc is 1.15 times less risky than Sonos. It trades about 0.06 of its potential returns per unit of risk. Sonos Inc is currently generating about -0.02 per unit of risk. If you would invest 15,248 in Flutter Entertainment plc on November 2, 2024 and sell it today you would earn a total of 11,951 from holding Flutter Entertainment plc or generate 78.38% 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. Sonos Inc
Performance |
| Timeline |
| Flutter Entertainment plc |
| Sonos Inc |
Flutter Entertainment and Sonos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Sonos
The main advantage of trading using opposite Flutter Entertainment and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Sonos 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 Sonos will offset losses from the drop in Sonos' long position.| Flutter Entertainment vs. Universal Music Group | Flutter Entertainment vs. Kulicke and Soffa | Flutter Entertainment vs. NETGEAR | Flutter Entertainment vs. Academy Sports Outdoors |
| Sonos vs. LG Display Co | Sonos vs. Zepp Health Corp | Sonos vs. VOXX International | Sonos vs. Samsung Electronics Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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