Correlation Between Entain DRC and Flutter Entertainment

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

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

Diversification Opportunities for Entain DRC and Flutter Entertainment

-0.43

Correlation Coefficient

Entain DRC  Flutter Entertainment

Very good diversification

The 3 months correlation between Entain and Flutter is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Entain DRC PLC 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 Entain DRC 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 DRC PLC 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 Entain DRC i.e., Entain DRC and Flutter Entertainment go up and down completely randomly.

Pair Corralation between Entain DRC and Flutter Entertainment

If you would invest  19,738  in Flutter Entertainment Plc on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Flutter Entertainment Plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Entain DRC PLC  vs.  Flutter Entertainment Plc

Entain DRC PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entain DRC PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Flutter Entertainment Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flutter Entertainment Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Flutter Entertainment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Entain DRC and Flutter Entertainment

The main advantage of trading using opposite Entain DRC and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entain DRC 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 Entain DRC PLC 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.