Correlation Between Guangdong Investment and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and Flutter Entertainment 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 Guangdong Investment and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment Limited and Flutter Entertainment PLC, you can compare the effects of market volatilities on Guangdong Investment and Flutter Entertainment 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 Guangdong Investment with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Flutter Entertainment.
Diversification Opportunities for Guangdong Investment and Flutter Entertainment
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangdong and Flutter is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Flutter Entertainment PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment PLC and Guangdong Investment 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 Guangdong Investment Limited are associated (or correlated) with Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment PLC has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and Flutter Entertainment go up and down completely randomly.
Pair Corralation between Guangdong Investment and Flutter Entertainment
Assuming the 90 days horizon Guangdong Investment Limited is expected to under-perform the Flutter Entertainment. In addition to that, Guangdong Investment is 2.32 times more volatile than Flutter Entertainment PLC. It trades about -0.16 of its total potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.11 per unit of volatility. If you would invest 24,570 in Flutter Entertainment PLC on October 26, 2024 and sell it today you would earn a total of 770.00 from holding Flutter Entertainment PLC or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Investment Limited vs. Flutter Entertainment PLC
Performance |
| Timeline |
| Guangdong Investment |
| Flutter Entertainment PLC |
Guangdong Investment and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and Flutter Entertainment
The main advantage of trading using opposite Guangdong Investment and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, Flutter Entertainment 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 Flutter Entertainment will offset losses from the drop in Flutter Entertainment's long position.| Guangdong Investment vs. NEW MILLENNIUM IRON | Guangdong Investment vs. Shin Etsu Chemical Co | Guangdong Investment vs. PTT Global Chemical | Guangdong Investment vs. RELIANCE STEEL AL |
| Flutter Entertainment vs. TRAINLINE PLC LS | Flutter Entertainment vs. Micron Technology | Flutter Entertainment vs. AECOM TECHNOLOGY | Flutter Entertainment vs. Easy Software AG |
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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