Correlation Between Flutter Entertainment and Montana Technologies

Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Montana Technologies 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 Montana Technologies 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 Montana Technologies, you can compare the effects of market volatilities on Flutter Entertainment and Montana Technologies 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 Montana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Montana Technologies.

Diversification Opportunities for Flutter Entertainment and Montana Technologies

0.26

Correlation Coefficient

Flutter Entertainment  Montana Technologies

Modest diversification

The 3 months correlation between Flutter and Montana is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Montana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montana Technologies 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 Montana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montana Technologies has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Montana Technologies go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Montana Technologies

Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 0.31 times more return on investment than Montana Technologies. However, Flutter Entertainment plc is 3.21 times less risky than Montana Technologies. It trades about -0.05 of its potential returns per unit of risk. Montana Technologies is currently generating about -0.03 per unit of risk. If you would invest  26,103  in Flutter Entertainment plc on December 21, 2024 and sell it today you would lose (2,018) from holding Flutter Entertainment plc or give up 7.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Flutter Entertainment plc  vs.  Montana Technologies

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 unsteady 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.

Montana Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Montana Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Flutter Entertainment and Montana Technologies

The main advantage of trading using opposite Flutter Entertainment and Montana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Montana Technologies 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 Montana Technologies will offset losses from the drop in Montana Technologies' long position.

The idea behind Flutter Entertainment plc and Montana Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.