Correlation Between Flutter Entertainment and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Martin Marietta 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 Martin Marietta 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 Martin Marietta Materials, you can compare the effects of market volatilities on Flutter Entertainment and Martin Marietta 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 Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Martin Marietta.
Diversification Opportunities for Flutter Entertainment and Martin Marietta
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flutter and Martin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials 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 Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Martin Marietta go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Martin Marietta
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.7 times more return on investment than Martin Marietta. However, Flutter Entertainment is 1.7 times more volatile than Martin Marietta Materials. It trades about 0.2 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.26 per unit of risk. If you would invest 21,760 in Flutter Entertainment PLC on September 5, 2024 and sell it today you would earn a total of 4,940 from holding Flutter Entertainment PLC or generate 22.7% 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. Martin Marietta Materials
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Martin Marietta Materials |
Flutter Entertainment and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Martin Marietta
The main advantage of trading using opposite Flutter Entertainment and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
| Martin Marietta vs. Insteel Industries | Martin Marietta vs. BLUESCOPE STEEL | Martin Marietta vs. KINGBOARD CHEMICAL | Martin Marietta vs. CECO ENVIRONMENTAL |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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