Correlation Between Flutter Entertainment and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Gamma Communications 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 Gamma Communications 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 Gamma Communications plc, you can compare the effects of market volatilities on Flutter Entertainment and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Gamma Communications.
Diversification Opportunities for Flutter Entertainment and Gamma Communications
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flutter and Gamma is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Gamma Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications plc 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications plc has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Gamma Communications go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Gamma Communications
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.41 times more return on investment than Gamma Communications. However, Flutter Entertainment is 1.41 times more volatile than Gamma Communications plc. It trades about 0.56 of its potential returns per unit of risk. Gamma Communications plc is currently generating about -0.06 per unit of risk. If you would invest 20,520 in Flutter Entertainment PLC on August 29, 2024 and sell it today you would earn a total of 5,890 from holding Flutter Entertainment PLC or generate 28.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Gamma Communications plc
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Gamma Communications plc |
Flutter Entertainment and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Gamma Communications
The main advantage of trading using opposite Flutter Entertainment and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
| Gamma Communications vs. QINGCI GAMES INC | Gamma Communications vs. TROPHY GAMES DEV | Gamma Communications vs. GigaMedia | Gamma Communications vs. Perseus Mining Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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