Correlation Between Flutter Entertainment and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Norwegian Air 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 Norwegian Air 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 Norwegian Air Shuttle, you can compare the effects of market volatilities on Flutter Entertainment and Norwegian Air 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 Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Norwegian Air.
Diversification Opportunities for Flutter Entertainment and Norwegian Air
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flutter and Norwegian is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Norwegian Air Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwegian Air Shuttle 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 Norwegian Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwegian Air Shuttle has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Norwegian Air go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Norwegian Air
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.73 times more return on investment than Norwegian Air. However, Flutter Entertainment PLC is 1.37 times less risky than Norwegian Air. It trades about 0.09 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.0 per unit of risk. If you would invest 22,900 in Flutter Entertainment PLC on October 10, 2024 and sell it today you would earn a total of 1,400 from holding Flutter Entertainment PLC or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Flutter Entertainment PLC |
| Norwegian Air Shuttle |
Flutter Entertainment and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Norwegian Air
The main advantage of trading using opposite Flutter Entertainment and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Norwegian Air 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 Norwegian Air will offset losses from the drop in Norwegian Air's long position.| Flutter Entertainment vs. PARKEN Sport Entertainment | Flutter Entertainment vs. SEI INVESTMENTS | Flutter Entertainment vs. Guangdong Investment Limited | Flutter Entertainment vs. ANTA SPORTS PRODUCT |
| Norwegian Air vs. Data Modul AG | Norwegian Air vs. CN DATANG C | Norwegian Air vs. SCANSOURCE | Norwegian Air vs. Cass Information Systems |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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