Correlation Between Flutter Entertainment and EMPLOYERS HLDGS
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and EMPLOYERS HLDGS 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 EMPLOYERS HLDGS 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 EMPLOYERS HLDGS DL, you can compare the effects of market volatilities on Flutter Entertainment and EMPLOYERS HLDGS 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 EMPLOYERS HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and EMPLOYERS HLDGS.
Diversification Opportunities for Flutter Entertainment and EMPLOYERS HLDGS
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Flutter and EMPLOYERS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and EMPLOYERS HLDGS DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMPLOYERS HLDGS DL 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 EMPLOYERS HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMPLOYERS HLDGS DL has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and EMPLOYERS HLDGS go up and down completely randomly.
Pair Corralation between Flutter Entertainment and EMPLOYERS HLDGS
Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.86 times more return on investment than EMPLOYERS HLDGS. However, Flutter Entertainment is 1.86 times more volatile than EMPLOYERS HLDGS DL. It trades about 0.1 of its potential returns per unit of risk. EMPLOYERS HLDGS DL is currently generating about 0.11 per unit of risk. If you would invest 14,375 in Flutter Entertainment PLC on September 14, 2024 and sell it today you would earn a total of 11,905 from holding Flutter Entertainment PLC or generate 82.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flutter Entertainment PLC vs. EMPLOYERS HLDGS DL
Performance |
| Timeline |
| Flutter Entertainment PLC |
| EMPLOYERS HLDGS DL |
Flutter Entertainment and EMPLOYERS HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and EMPLOYERS HLDGS
The main advantage of trading using opposite Flutter Entertainment and EMPLOYERS HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, EMPLOYERS HLDGS 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 EMPLOYERS HLDGS will offset losses from the drop in EMPLOYERS HLDGS's long position.| Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc | Flutter Entertainment vs. Apple Inc |
| EMPLOYERS HLDGS vs. Flutter Entertainment PLC | EMPLOYERS HLDGS vs. XLMedia PLC | EMPLOYERS HLDGS vs. TOWNSQUARE MEDIA INC | EMPLOYERS HLDGS vs. TRADEDOUBLER AB SK |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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