Correlation Between Sterling Construction and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both Sterling Construction 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 Sterling Construction and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and Flutter Entertainment PLC, you can compare the effects of market volatilities on Sterling Construction 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 Sterling Construction with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and Flutter Entertainment.
Diversification Opportunities for Sterling Construction and Flutter Entertainment
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and Flutter is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction 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 Sterling Construction 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 Sterling Construction 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 Sterling Construction i.e., Sterling Construction and Flutter Entertainment go up and down completely randomly.
Pair Corralation between Sterling Construction and Flutter Entertainment
Assuming the 90 days horizon Sterling Construction is expected to generate 1.51 times more return on investment than Flutter Entertainment. However, Sterling Construction is 1.51 times more volatile than Flutter Entertainment PLC. It trades about 0.09 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.05 per unit of risk. If you would invest 3,220 in Sterling Construction on November 28, 2024 and sell it today you would earn a total of 7,865 from holding Sterling Construction or generate 244.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. Flutter Entertainment PLC
Performance |
| Timeline |
| Sterling Construction |
| Flutter Entertainment PLC |
Sterling Construction and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and Flutter Entertainment
The main advantage of trading using opposite Sterling Construction and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction 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.| Sterling Construction vs. PARKEN SPORT ENT | Sterling Construction vs. Corporate Travel Management | Sterling Construction vs. Yuexiu Transport Infrastructure | Sterling Construction vs. CEOTRONICS |
| Flutter Entertainment vs. EPSILON HEALTHCARE LTD | Flutter Entertainment vs. OPKO HEALTH | Flutter Entertainment vs. Molina Healthcare | Flutter Entertainment vs. United Utilities Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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