Correlation Between Inspired Entertainment and Flutter Entertainment

Can any of the company-specific risk be diversified away by investing in both Inspired Entertainment and Flutter Entertainment 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 Inspired Entertainment and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inspired Entertainment and Flutter Entertainment Plc, you can compare the effects of market volatilities on Inspired Entertainment and Flutter Entertainment 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 Inspired Entertainment with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspired Entertainment and Flutter Entertainment.

Diversification Opportunities for Inspired Entertainment and Flutter Entertainment

0.0

Correlation Coefficient

Inspired Entertainment  Flutter Entertainment

Pay attention - limited upside

The 3 months correlation between Inspired and Flutter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Inspired Entertainment and Flutter Entertainment Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment Plc and Inspired 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 Inspired Entertainment are associated (or correlated) with Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment Plc has no effect on the direction of Inspired Entertainment i.e., Inspired Entertainment and Flutter Entertainment go up and down completely randomly.

Pair Corralation between Inspired Entertainment and Flutter Entertainment

If you would invest  962.00  in Inspired Entertainment on November 28, 2024 and sell it today you would earn a total of  138.00  from holding Inspired Entertainment or generate 14.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Inspired Entertainment  vs.  Flutter Entertainment Plc

Inspired Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inspired Entertainment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Inspired Entertainment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Flutter Entertainment Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flutter Entertainment Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Flutter Entertainment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Inspired Entertainment and Flutter Entertainment

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

The idea behind Inspired Entertainment and Flutter Entertainment Plc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.