Correlation Between Flutter Entertainment and Mitsui Chemicals
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Mitsui Chemicals 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 Mitsui Chemicals 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 Mitsui Chemicals, you can compare the effects of market volatilities on Flutter Entertainment and Mitsui Chemicals 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 Mitsui Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Mitsui Chemicals.
Diversification Opportunities for Flutter Entertainment and Mitsui Chemicals
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flutter and Mitsui is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Mitsui Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Chemicals 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 Mitsui Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Chemicals has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Mitsui Chemicals go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Mitsui Chemicals
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.39 times more return on investment than Mitsui Chemicals. However, Flutter Entertainment is 1.39 times more volatile than Mitsui Chemicals. It trades about 0.09 of its potential returns per unit of risk. Mitsui Chemicals is currently generating about -0.13 per unit of risk. If you would invest 24,570 in Flutter Entertainment PLC on October 26, 2024 and sell it today you would earn a total of 670.00 from holding Flutter Entertainment PLC or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Mitsui Chemicals
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Mitsui Chemicals |
Flutter Entertainment and Mitsui Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Mitsui Chemicals
The main advantage of trading using opposite Flutter Entertainment and Mitsui Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Mitsui Chemicals 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 Mitsui Chemicals will offset losses from the drop in Mitsui Chemicals' long position.| Flutter Entertainment vs. TRAINLINE PLC LS | Flutter Entertainment vs. Micron Technology | Flutter Entertainment vs. AECOM TECHNOLOGY | Flutter Entertainment vs. Easy Software AG |
| Mitsui Chemicals vs. Sixt Leasing SE | Mitsui Chemicals vs. De Grey Mining | Mitsui Chemicals vs. Canadian Utilities Limited | Mitsui Chemicals vs. UNITED RENTALS |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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