Correlation Between Flutter Entertainment and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Hanover Insurance 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 Hanover Insurance 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 The Hanover Insurance, you can compare the effects of market volatilities on Flutter Entertainment and Hanover Insurance 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 Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Hanover Insurance.
Diversification Opportunities for Flutter Entertainment and Hanover Insurance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Flutter and Hanover is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance 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 Hanover Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Insurance has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Hanover Insurance go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Hanover Insurance
Assuming the 90 days horizon Flutter Entertainment PLC is expected to generate 1.83 times more return on investment than Hanover Insurance. However, Flutter Entertainment is 1.83 times more volatile than The Hanover Insurance. It trades about 0.27 of its potential returns per unit of risk. The Hanover Insurance is currently generating about 0.06 per unit of risk. If you would invest 23,530 in Flutter Entertainment PLC on September 12, 2024 and sell it today you would earn a total of 3,280 from holding Flutter Entertainment PLC or generate 13.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. The Hanover Insurance
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Hanover Insurance |
Flutter Entertainment and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Hanover Insurance
The main advantage of trading using opposite Flutter Entertainment and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Hanover Insurance 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 Hanover Insurance will offset losses from the drop in Hanover Insurance's long position.| Flutter Entertainment vs. DOCDATA | Flutter Entertainment vs. Cars Inc | Flutter Entertainment vs. Grupo Carso SAB | Flutter Entertainment vs. DATAGROUP SE |
| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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