Correlation Between Flutter Entertainment and BSANCI

Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and BSANCI 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 BSANCI 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 BSANCI 27 10 JAN 25, you can compare the effects of market volatilities on Flutter Entertainment and BSANCI 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 BSANCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and BSANCI.

Diversification Opportunities for Flutter Entertainment and BSANCI

0.7

Correlation Coefficient

Flutter Entertainment  BSANCI

Poor diversification

The 3 months correlation between Flutter and BSANCI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and BSANCI 27 10 JAN 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSANCI 27 10 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 BSANCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSANCI 27 10 has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and BSANCI go up and down completely randomly.

Pair Corralation between Flutter Entertainment and BSANCI

Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 0.71 times more return on investment than BSANCI. However, Flutter Entertainment plc is 1.42 times less risky than BSANCI. It trades about -0.3 of its potential returns per unit of risk. BSANCI 27 10 JAN 25 is currently generating about -0.96 per unit of risk. If you would invest  27,152  in Flutter Entertainment plc on October 10, 2024 and sell it today you would lose (1,966) from holding Flutter Entertainment plc or give up 7.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	14.29%
Values	Daily Returns

Flutter Entertainment plc  vs.  BSANCI 27 10 JAN 25

Flutter Entertainment plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Flutter Entertainment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BSANCI 27 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BSANCI 27 10 JAN 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for BSANCI 27 10 JAN 25 investors.

Pair Trading with Flutter Entertainment and BSANCI

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

The idea behind Flutter Entertainment plc and BSANCI 27 10 JAN 25 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.