Correlation Between United Airlines and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both United Airlines and Flutter Entertainment 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 United Airlines and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and Flutter Entertainment PLC, you can compare the effects of market volatilities on United Airlines and Flutter Entertainment 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 United Airlines with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Flutter Entertainment.
Diversification Opportunities for United Airlines and Flutter Entertainment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Flutter is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Flutter Entertainment PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment PLC and United Airlines 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 United Airlines Holdings are associated (or correlated) with Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment PLC has no effect on the direction of United Airlines i.e., United Airlines and Flutter Entertainment go up and down completely randomly.
Pair Corralation between United Airlines and Flutter Entertainment
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.74 times more return on investment than Flutter Entertainment. However, United Airlines is 1.74 times more volatile than Flutter Entertainment PLC. It trades about 0.1 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about -0.03 per unit of risk. If you would invest 9,142 in United Airlines Holdings on October 30, 2024 and sell it today you would earn a total of 910.00 from holding United Airlines Holdings or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Flutter Entertainment PLC
Performance |
| Timeline |
| United Airlines Holdings |
| Flutter Entertainment PLC |
United Airlines and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Flutter Entertainment
The main advantage of trading using opposite United Airlines and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Flutter Entertainment 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 Flutter Entertainment will offset losses from the drop in Flutter Entertainment's long position.| United Airlines vs. Lery Seafood Group | United Airlines vs. TYSON FOODS A | United Airlines vs. COFCO Joycome Foods | United Airlines vs. GWILLI FOOD |
| Flutter Entertainment vs. GigaMedia | Flutter Entertainment vs. GAMING FAC SA | Flutter Entertainment vs. Media and Games | Flutter Entertainment vs. PLAYMATES TOYS |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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