Correlation Between Flutter Entertainment and Gambling

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

Diversification Opportunities for Flutter Entertainment and Gambling

0.19

Correlation Coefficient

Flutter Entertainment  Gambling

Average diversification

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

Pair Corralation between Flutter Entertainment and Gambling

If you would invest  1,291  in Gambling Group on September 21, 2024 and sell it today you would earn a total of  158.00  from holding Gambling Group or generate 12.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Flutter Entertainment Plc  vs.  Gambling Group

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.

Gambling Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gambling Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, Gambling sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and Gambling

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

The idea behind Flutter Entertainment Plc and Gambling Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.