Correlation Between EMBARK EDUCATION and Flutter Entertainment

Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION 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 EMBARK EDUCATION and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EMBARK EDUCATION LTD and Flutter Entertainment PLC, you can compare the effects of market volatilities on EMBARK EDUCATION 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 EMBARK EDUCATION with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and Flutter Entertainment.

Diversification Opportunities for EMBARK EDUCATION and Flutter Entertainment

-0.06

Correlation Coefficient

EMBARK EDUCATION  Flutter Entertainment

Good diversification

The 3 months correlation between EMBARK and Flutter is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and Flutter Entertainment go up and down completely randomly.

Pair Corralation between EMBARK EDUCATION and Flutter Entertainment

Assuming the 90 days horizon EMBARK EDUCATION LTD is expected to generate 0.26 times more return on investment than Flutter Entertainment. However, EMBARK EDUCATION LTD is 3.84 times less risky than Flutter Entertainment. It trades about 0.0 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about -0.08 per unit of risk. If you would invest  31.00  in EMBARK EDUCATION LTD on December 23, 2024 and sell it today you would earn a total of  0.00  from holding EMBARK EDUCATION LTD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

EMBARK EDUCATION LTD  vs.  Flutter Entertainment PLC

EMBARK EDUCATION LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMBARK EDUCATION LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EMBARK EDUCATION is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Flutter Entertainment PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flutter Entertainment PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with EMBARK EDUCATION and Flutter Entertainment

The main advantage of trading using opposite EMBARK EDUCATION and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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.

The idea behind EMBARK EDUCATION LTD and Flutter Entertainment PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.