Correlation Between Flutter Entertainment and Apple
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Flutter Entertainment and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Apple.
Diversification Opportunities for Flutter Entertainment and Apple
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flutter and Apple is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Apple go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Apple
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.53 times more return on investment than Apple. However, Flutter Entertainment is 1.53 times more volatile than Apple Inc. It trades about 0.56 of its potential returns per unit of risk. Apple Inc is currently generating about 0.13 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Apple Inc
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Apple Inc |
Flutter Entertainment and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Apple
The main advantage of trading using opposite Flutter Entertainment and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
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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