Correlation Between ArcelorMittal and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal 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 ArcelorMittal and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA ADR and Flutter Entertainment plc, you can compare the effects of market volatilities on ArcelorMittal 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 ArcelorMittal with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Flutter Entertainment.
Diversification Opportunities for ArcelorMittal and Flutter Entertainment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ArcelorMittal and Flutter is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR 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 ArcelorMittal 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 ArcelorMittal SA ADR 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 ArcelorMittal i.e., ArcelorMittal and Flutter Entertainment go up and down completely randomly.
Pair Corralation between ArcelorMittal and Flutter Entertainment
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to generate 1.49 times more return on investment than Flutter Entertainment. However, ArcelorMittal is 1.49 times more volatile than Flutter Entertainment plc. It trades about 0.08 of its potential returns per unit of risk. Flutter Entertainment plc is currently generating about 0.08 per unit of risk. If you would invest 2,584 in ArcelorMittal SA ADR on November 8, 2024 and sell it today you would earn a total of 249.00 from holding ArcelorMittal SA ADR or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Flutter Entertainment plc
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Flutter Entertainment plc |
ArcelorMittal and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Flutter Entertainment
The main advantage of trading using opposite ArcelorMittal and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal 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.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| Flutter Entertainment vs. Udemy Inc | Flutter Entertainment vs. Coupang LLC | Flutter Entertainment vs. GMO Internet | Flutter Entertainment vs. Radcom |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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