Correlation Between Flutter Entertainment and EPR Properties

Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and EPR Properties 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 EPR Properties 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 EPR Properties 5750, you can compare the effects of market volatilities on Flutter Entertainment and EPR Properties 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 EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and EPR Properties.

Diversification Opportunities for Flutter Entertainment and EPR Properties

-0.42

Correlation Coefficient

Flutter Entertainment  EPR Properties

Very good diversification

The 3 months correlation between Flutter and EPR is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and EPR Properties 5750 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 5750 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 EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties 5750 has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and EPR Properties go up and down completely randomly.

Pair Corralation between Flutter Entertainment and EPR Properties

Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 1.09 times more return on investment than EPR Properties. However, Flutter Entertainment is 1.09 times more volatile than EPR Properties 5750. It trades about -0.26 of its potential returns per unit of risk. EPR Properties 5750 is currently generating about -0.42 per unit of risk. If you would invest  27,152  in Flutter Entertainment plc on October 9, 2024 and sell it today you would lose (1,640) from holding Flutter Entertainment plc or give up 6.04% of portfolio value over 90 days.

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

Flutter Entertainment plc  vs.  EPR Properties 5750

Flutter Entertainment plc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Flutter Entertainment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

EPR Properties 5750

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPR Properties 5750 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Preferred Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Flutter Entertainment and EPR Properties

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

The idea behind Flutter Entertainment plc and EPR Properties 5750 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.