Correlation Between Flutter Entertainment and Orange SA
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Orange SA 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 Orange SA 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 Orange SA, you can compare the effects of market volatilities on Flutter Entertainment and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Orange SA.
Diversification Opportunities for Flutter Entertainment and Orange SA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flutter and Orange is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Orange SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Orange SA go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Orange SA
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.74 times more return on investment than Orange SA. However, Flutter Entertainment is 1.74 times more volatile than Orange SA. It trades about 0.32 of its potential returns per unit of risk. Orange SA is currently generating about -0.02 per unit of risk. If you would invest 22,900 in Flutter Entertainment PLC on September 12, 2024 and sell it today you would earn a total of 3,420 from holding Flutter Entertainment PLC or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Orange SA
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Orange SA |
Flutter Entertainment and Orange SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Orange SA
The main advantage of trading using opposite Flutter Entertainment and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA's long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
| Orange SA vs. Superior Plus Corp | Orange SA vs. SIVERS SEMICONDUCTORS AB | Orange SA vs. Norsk Hydro ASA | Orange SA vs. Reliance Steel Aluminum |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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