Correlation Between Kenon Holdings and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both Kenon Holdings 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 Kenon Holdings and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenon Holdings and Flutter Entertainment plc, you can compare the effects of market volatilities on Kenon Holdings 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 Kenon Holdings with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and Flutter Entertainment.
Diversification Opportunities for Kenon Holdings and Flutter Entertainment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kenon and Flutter is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings 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 Kenon Holdings 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 Kenon Holdings 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 Kenon Holdings i.e., Kenon Holdings and Flutter Entertainment go up and down completely randomly.
Pair Corralation between Kenon Holdings and Flutter Entertainment
Considering the 90-day investment horizon Kenon Holdings is expected to generate 1.07 times less return on investment than Flutter Entertainment. But when comparing it to its historical volatility, Kenon Holdings is 1.02 times less risky than Flutter Entertainment. It trades about 0.06 of its potential returns per unit of risk. Flutter Entertainment plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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 |
Kenon Holdings vs. Flutter Entertainment plc
Performance |
| Timeline |
| Kenon Holdings |
| Flutter Entertainment plc |
Kenon Holdings and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenon Holdings and Flutter Entertainment
The main advantage of trading using opposite Kenon Holdings and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings 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.| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
| Flutter Entertainment vs. Universal Music Group | Flutter Entertainment vs. Kulicke and Soffa | Flutter Entertainment vs. NETGEAR | Flutter Entertainment vs. Academy Sports Outdoors |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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