Correlation Between Flutter Entertainment and JX Luxventure

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

Diversification Opportunities for Flutter Entertainment and JX Luxventure

-0.19

Correlation Coefficient

Flutter Entertainment  JX Luxventure

Good diversification

The 3 months correlation between Flutter and JXG is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and JX Luxventure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JX Luxventure Limited 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 JX Luxventure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JX Luxventure Limited has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and JX Luxventure go up and down completely randomly.

Pair Corralation between Flutter Entertainment and JX Luxventure

Given the investment horizon of 90 days Flutter Entertainment is expected to generate 259.93 times less return on investment than JX Luxventure. But when comparing it to its historical volatility, Flutter Entertainment plc is 46.41 times less risky than JX Luxventure. It trades about 0.04 of its potential returns per unit of risk. JX Luxventure Limited is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  83.00  in JX Luxventure Limited on October 23, 2024 and sell it today you would earn a total of  194.00  from holding JX Luxventure Limited or generate 233.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Flutter Entertainment plc  vs.  JX Luxventure Limited

Flutter Entertainment plc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

JX Luxventure Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JX Luxventure Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, JX Luxventure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and JX Luxventure

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

The idea behind Flutter Entertainment plc and JX Luxventure Limited 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.