Correlation Between Entain Plc and Lottery, Common

Can any of the company-specific risk be diversified away by investing in both Entain Plc and Lottery, Common 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 Entain Plc and Lottery, Common into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Entain Plc and Lottery, Common Stock, you can compare the effects of market volatilities on Entain Plc and Lottery, Common 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 Entain Plc with a short position of Lottery, Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entain Plc and Lottery, Common.

Diversification Opportunities for Entain Plc and Lottery, Common

-0.35

Correlation Coefficient

Entain Plc  Lottery, Common

Very good diversification

The 3 months correlation between Entain and Lottery, is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Entain Plc and Lottery, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lottery, Common Stock and Entain Plc 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 Entain Plc are associated (or correlated) with Lottery, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lottery, Common Stock has no effect on the direction of Entain Plc i.e., Entain Plc and Lottery, Common go up and down completely randomly.

Pair Corralation between Entain Plc and Lottery, Common

Assuming the 90 days horizon Entain Plc is expected to generate 0.47 times more return on investment than Lottery, Common. However, Entain Plc is 2.11 times less risky than Lottery, Common. It trades about 0.08 of its potential returns per unit of risk. Lottery, Common Stock is currently generating about -0.18 per unit of risk. If you would invest  868.00  in Entain Plc on August 30, 2024 and sell it today you would earn a total of  123.00  from holding Entain Plc or generate 14.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Entain Plc  vs.  Lottery, Common Stock

Entain Plc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Entain Plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Entain Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Lottery, Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lottery, Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Entain Plc and Lottery, Common

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

The idea behind Entain Plc and Lottery, Common Stock 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.