Correlation Between Mosaic and Flutter Entertainment

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

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

Diversification Opportunities for Mosaic and Flutter Entertainment

-0.07

Correlation Coefficient

Mosaic  Flutter Entertainment

Good diversification

The 3 months correlation between Mosaic and Flutter is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic 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 Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and Flutter Entertainment go up and down completely randomly.

Pair Corralation between Mosaic and Flutter Entertainment

Considering the 90-day investment horizon The Mosaic is expected to generate 0.99 times more return on investment than Flutter Entertainment. However, The Mosaic is 1.01 times less risky than Flutter Entertainment. It trades about 0.11 of its potential returns per unit of risk. Flutter Entertainment plc is currently generating about -0.05 per unit of risk. If you would invest  2,378  in The Mosaic on December 28, 2024 and sell it today you would earn a total of  370.00  from holding The Mosaic or generate 15.56% return on investment over 90 days.

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

The Mosaic  vs.  Flutter Entertainment plc

Mosaic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Mosaic unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 unfluctuating 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 Mosaic and Flutter Entertainment

The main advantage of trading using opposite Mosaic and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic 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 The Mosaic 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.