Correlation Between Flutter Entertainment and SupplyMe Capital

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

Diversification Opportunities for Flutter Entertainment and SupplyMe Capital

-0.08

Correlation Coefficient

Flutter Entertainment  SupplyMe Capital

Good diversification

The 3 months correlation between Flutter and SupplyMe is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital PLC 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and SupplyMe Capital go up and down completely randomly.

Pair Corralation between Flutter Entertainment and SupplyMe Capital

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.19 times more return on investment than SupplyMe Capital. However, Flutter Entertainment PLC is 5.16 times less risky than SupplyMe Capital. It trades about 0.1 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about -0.09 per unit of risk. If you would invest  2,091,000  in Flutter Entertainment PLC on October 22, 2024 and sell it today you would earn a total of  45,000  from holding Flutter Entertainment PLC or generate 2.15% return on investment over 90 days.

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

Flutter Entertainment PLC  vs.  SupplyMe Capital PLC

Flutter Entertainment PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment PLC are ranked lower than 13 (%) 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.

SupplyMe Capital PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SupplyMe Capital PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SupplyMe Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and SupplyMe Capital

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

The idea behind Flutter Entertainment PLC and SupplyMe Capital 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.