Correlation Between Flutter Entertainment and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and NH HOTEL 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 NH HOTEL 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 NH HOTEL GROUP, you can compare the effects of market volatilities on Flutter Entertainment and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and NH HOTEL.
Diversification Opportunities for Flutter Entertainment and NH HOTEL
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flutter and NH5 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and NH HOTEL go up and down completely randomly.
Pair Corralation between Flutter Entertainment and NH HOTEL
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 3.23 times more return on investment than NH HOTEL. However, Flutter Entertainment is 3.23 times more volatile than NH HOTEL GROUP. It trades about 0.04 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about -0.11 per unit of risk. If you would invest 24,750 in Flutter Entertainment PLC on October 30, 2024 and sell it today you would earn a total of 290.00 from holding Flutter Entertainment PLC or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. NH HOTEL GROUP
Performance |
| Timeline |
| Flutter Entertainment PLC |
| NH HOTEL GROUP |
Flutter Entertainment and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and NH HOTEL
The main advantage of trading using opposite Flutter Entertainment and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Flutter Entertainment vs. GigaMedia | Flutter Entertainment vs. GAMING FAC SA | Flutter Entertainment vs. Media and Games | Flutter Entertainment vs. PLAYMATES TOYS |
| NH HOTEL vs. China Eastern Airlines | NH HOTEL vs. PLAYMATES TOYS | NH HOTEL vs. FRACTAL GAMING GROUP | NH HOTEL vs. GameStop Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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