Correlation Between Flutter Entertainment and Carrefour

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

Diversification Opportunities for Flutter Entertainment and Carrefour

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Flutter and Carrefour is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA 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 Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Carrefour go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Carrefour

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.53 times more return on investment than Carrefour. However, Flutter Entertainment is 1.53 times more volatile than Carrefour SA. It trades about 0.09 of its potential returns per unit of risk. Carrefour SA is currently generating about -0.04 per unit of risk. If you would invest  14,465  in Flutter Entertainment PLC on September 28, 2024 and sell it today you would earn a total of  10,405  from holding Flutter Entertainment PLC or generate 71.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Flutter Entertainment PLC  vs.  Carrefour SA

 Performance 
       Timeline  
Flutter Entertainment PLC 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.
Carrefour SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Carrefour SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Flutter Entertainment and Carrefour Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Flutter Entertainment and Carrefour

The main advantage of trading using opposite Flutter Entertainment and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour's long position.
The idea behind Flutter Entertainment PLC and Carrefour SA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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