Correlation Between Flutter Entertainment and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on Flutter Entertainment and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and UNITED RENTALS.
Diversification Opportunities for Flutter Entertainment and UNITED RENTALS
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flutter and UNITED is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Flutter Entertainment and UNITED RENTALS
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.86 times more return on investment than UNITED RENTALS. However, Flutter Entertainment PLC is 1.16 times less risky than UNITED RENTALS. It trades about 0.4 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.09 per unit of risk. If you would invest 20,970 in Flutter Entertainment PLC on August 25, 2024 and sell it today you would earn a total of 4,280 from holding Flutter Entertainment PLC or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. UNITED RENTALS
Performance |
| Timeline |
| Flutter Entertainment PLC |
| UNITED RENTALS |
Flutter Entertainment and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and UNITED RENTALS
The main advantage of trading using opposite Flutter Entertainment and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS's long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
| UNITED RENTALS vs. CONAGRA FOODS | UNITED RENTALS vs. ON SEMICONDUCTOR | UNITED RENTALS vs. JJ SNACK FOODS | UNITED RENTALS vs. PT Indofood Sukses |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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