Correlation Between DAX Index and Flutter Entertainment
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By analyzing existing cross correlation between DAX Index and Flutter Entertainment PLC, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Flutter Entertainment.
Diversification Opportunities for DAX Index and Flutter Entertainment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Flutter is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Flutter Entertainment go up and down completely randomly.
Pair Corralation between DAX Index and Flutter Entertainment
Assuming the 90 days trading horizon DAX Index is expected to generate 2.31 times less return on investment than Flutter Entertainment. But when comparing it to its historical volatility, DAX Index is 3.06 times less risky than Flutter Entertainment. It trades about 0.09 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 19,920 in Flutter Entertainment PLC on September 7, 2024 and sell it today you would earn a total of 6,280 from holding Flutter Entertainment PLC or generate 31.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. Flutter Entertainment PLC
Performance |
Timeline |
DAX Index and Flutter Entertainment Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Flutter Entertainment PLC
Pair trading matchups for Flutter Entertainment
Pair Trading with DAX Index and Flutter Entertainment
The main advantage of trading using opposite DAX Index and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.DAX Index vs. Fukuyama Transporting Co | DAX Index vs. Corsair Gaming | DAX Index vs. Transport International Holdings | DAX Index vs. Westinghouse Air Brake |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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