Correlation Between Flutter Entertainment and Beijing MediaLimited
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Beijing MediaLimited 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 Beijing MediaLimited 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 Beijing Media, you can compare the effects of market volatilities on Flutter Entertainment and Beijing MediaLimited 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 Beijing MediaLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Beijing MediaLimited.
Diversification Opportunities for Flutter Entertainment and Beijing MediaLimited
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flutter and Beijing is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing MediaLimited 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 Beijing MediaLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing MediaLimited has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Beijing MediaLimited go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Beijing MediaLimited
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.39 times more return on investment than Beijing MediaLimited. However, Flutter Entertainment PLC is 2.55 times less risky than Beijing MediaLimited. It trades about 0.05 of its potential returns per unit of risk. Beijing Media is currently generating about 0.02 per unit of risk. If you would invest 18,270 in Flutter Entertainment PLC on August 31, 2024 and sell it today you would earn a total of 7,370 from holding Flutter Entertainment PLC or generate 40.34% 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. Beijing Media
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Beijing MediaLimited |
Flutter Entertainment and Beijing MediaLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Beijing MediaLimited
The main advantage of trading using opposite Flutter Entertainment and Beijing MediaLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Beijing MediaLimited 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 Beijing MediaLimited will offset losses from the drop in Beijing MediaLimited's long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
| Beijing MediaLimited vs. NISSAN CHEMICAL IND | Beijing MediaLimited vs. Seven West Media | Beijing MediaLimited vs. Tencent Music Entertainment | Beijing MediaLimited vs. KINGBOARD CHEMICAL |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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