Correlation Between Flutter Entertainment and Zeo Energy

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

Diversification Opportunities for Flutter Entertainment and Zeo Energy

0.31

Correlation Coefficient

Flutter Entertainment  Zeo Energy

Weak diversification

The 3 months correlation between Flutter and Zeo is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Zeo Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeo Energy Corp 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 Zeo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeo Energy Corp has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Zeo Energy go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Zeo Energy

Given the investment horizon of 90 days Flutter Entertainment plc is expected to under-perform the Zeo Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Flutter Entertainment plc is 15.27 times less risky than Zeo Energy. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Zeo Energy Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  134.00  in Zeo Energy Corp on October 26, 2024 and sell it today you would earn a total of  152.00  from holding Zeo Energy Corp or generate 113.43% return on investment over 90 days.

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

Flutter Entertainment plc  vs.  Zeo Energy Corp

Flutter Entertainment plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment plc are ranked lower than 12 (%) 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.

Zeo Energy Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zeo Energy Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Zeo Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and Zeo Energy

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

The idea behind Flutter Entertainment plc and Zeo Energy Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.