Correlation Between Flutter Entertainment and Accel Entertainment

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

Diversification Opportunities for Flutter Entertainment and Accel Entertainment

0.26

Correlation Coefficient

Flutter Entertainment  Accel Entertainment

Modest diversification

The 3 months correlation between Flutter and Accel is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Accel Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Entertainment 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 Accel Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Entertainment has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Accel Entertainment go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Accel Entertainment

Assuming the 90 days horizon Flutter Entertainment PLC is expected to generate 1.03 times more return on investment than Accel Entertainment. However, Flutter Entertainment is 1.03 times more volatile than Accel Entertainment. It trades about 0.14 of its potential returns per unit of risk. Accel Entertainment is currently generating about 0.04 per unit of risk. If you would invest  6,822  in Flutter Entertainment PLC on September 20, 2024 and sell it today you would earn a total of  2,990  from holding Flutter Entertainment PLC or generate 43.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	28.43%
Values	Daily Returns

Flutter Entertainment PLC  vs.  Accel Entertainment

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. In spite of fairly strong basic indicators, Flutter Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Accel Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accel Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Flutter Entertainment and Accel Entertainment

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

The idea behind Flutter Entertainment PLC and Accel Entertainment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..