Correlation Between Flutter Entertainment and Fidelity Advisor

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

Diversification Opportunities for Flutter Entertainment and Fidelity Advisor

0.88

Correlation Coefficient

Flutter Entertainment  Fidelity Advisor

Very poor diversification

The 3 months correlation between Flutter and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Fidelity Advisor Sumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Sumer 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Sumer has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Fidelity Advisor

Given the investment horizon of 90 days Flutter Entertainment is expected to generate 3.23 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Flutter Entertainment plc is 1.23 times less risky than Fidelity Advisor. It trades about 0.01 of its potential returns per unit of risk. Fidelity Advisor Sumer is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,519  in Fidelity Advisor Sumer on October 21, 2024 and sell it today you would earn a total of  11.00  from holding Fidelity Advisor Sumer or generate 0.31% return on investment over 90 days.

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

Flutter Entertainment plc  vs.  Fidelity Advisor Sumer

Flutter Entertainment plc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Advisor Sumer

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Sumer are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Flutter Entertainment and Fidelity Advisor

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

The idea behind Flutter Entertainment plc and Fidelity Advisor Sumer 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..