Correlation Between Flutter Entertainment and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Berkshire Hathaway 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 Berkshire Hathaway 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 Berkshire Hathaway, you can compare the effects of market volatilities on Flutter Entertainment and Berkshire Hathaway 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 Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Berkshire Hathaway.
Diversification Opportunities for Flutter Entertainment and Berkshire Hathaway
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flutter and Berkshire is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway 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 Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Berkshire Hathaway
Assuming the 90 days trading horizon Flutter Entertainment is expected to generate 12.75 times less return on investment than Berkshire Hathaway. But when comparing it to its historical volatility, Flutter Entertainment PLC is 19.99 times less risky than Berkshire Hathaway. It trades about 0.07 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 43,400,000 in Berkshire Hathaway on August 30, 2024 and sell it today you would earn a total of 25,150,000 from holding Berkshire Hathaway or generate 57.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Berkshire Hathaway
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Berkshire Hathaway |
Flutter Entertainment and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Berkshire Hathaway
The main advantage of trading using opposite Flutter Entertainment and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
| Berkshire Hathaway vs. XLMedia PLC | Berkshire Hathaway vs. Nordic Semiconductor ASA | Berkshire Hathaway vs. REMEDY ENTERTAINMENT OYJ | Berkshire Hathaway vs. ZINC MEDIA GR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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