Correlation Between Flutter Entertainment and SAIHEAT

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

Diversification Opportunities for Flutter Entertainment and SAIHEAT

0.78

Correlation Coefficient

Flutter Entertainment  SAIHEAT

Poor diversification

The 3 months correlation between Flutter and SAIHEAT is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and SAIHEAT go up and down completely randomly.

Pair Corralation between Flutter Entertainment and SAIHEAT

Given the investment horizon of 90 days Flutter Entertainment plc is expected to under-perform the SAIHEAT. But the pink sheet apears to be less risky and, when comparing its historical volatility, Flutter Entertainment plc is 5.63 times less risky than SAIHEAT. The pink sheet trades about -0.31 of its potential returns per unit of risk. The SAIHEAT Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9.50  in SAIHEAT Limited on October 6, 2024 and sell it today you would earn a total of  0.32  from holding SAIHEAT Limited or generate 3.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	45.0%
Values	Daily Returns

Flutter Entertainment plc  vs.  SAIHEAT Limited

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 fragile basic indicators, Flutter Entertainment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SAIHEAT Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SAIHEAT Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, SAIHEAT showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and SAIHEAT

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

The idea behind Flutter Entertainment plc and SAIHEAT Limited 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.