Correlation Between Flutter Entertainment and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Luckin Coffee 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 Luckin Coffee 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 Luckin Coffee, you can compare the effects of market volatilities on Flutter Entertainment and Luckin Coffee 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 Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Luckin Coffee.
Diversification Opportunities for Flutter Entertainment and Luckin Coffee
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Flutter and Luckin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee 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 Luckin Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luckin Coffee has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Luckin Coffee go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Luckin Coffee
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.8 times more return on investment than Luckin Coffee. However, Flutter Entertainment PLC is 1.25 times less risky than Luckin Coffee. It trades about 0.16 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.11 per unit of risk. If you would invest 24,500 in Flutter Entertainment PLC on November 4, 2024 and sell it today you would earn a total of 1,370 from holding Flutter Entertainment PLC or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Luckin Coffee
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Luckin Coffee |
Flutter Entertainment and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Luckin Coffee
The main advantage of trading using opposite Flutter Entertainment and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Luckin Coffee 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 Luckin Coffee will offset losses from the drop in Luckin Coffee's long position.| Flutter Entertainment vs. PLAYMATES TOYS | Flutter Entertainment vs. Daido Steel Co | Flutter Entertainment vs. GameStop Corp | Flutter Entertainment vs. ELL ENVIRONHLDGS HD 0001 |
| Luckin Coffee vs. Keck Seng Investments | Luckin Coffee vs. Virtus Investment Partners | Luckin Coffee vs. EPSILON HEALTHCARE LTD | Luckin Coffee vs. Guangdong Investment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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