Correlation Between Flutter Entertainment and PlayAGS

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

Diversification Opportunities for Flutter Entertainment and PlayAGS

-0.07

Correlation Coefficient

Flutter Entertainment  PlayAGS

Good diversification

The 3 months correlation between Flutter and PlayAGS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and PlayAGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayAGS 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 PlayAGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayAGS has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and PlayAGS go up and down completely randomly.

Pair Corralation between Flutter Entertainment and PlayAGS

Assuming the 90 days horizon Flutter Entertainment PLC is expected to generate 0.68 times more return on investment than PlayAGS. However, Flutter Entertainment PLC is 1.46 times less risky than PlayAGS. It trades about 0.14 of its potential returns per unit of risk. PlayAGS is currently generating about 0.07 per unit of risk. If you would invest  6,822  in Flutter Entertainment PLC on September 20, 2024 and sell it today you would earn a total of  2,990  from holding Flutter Entertainment PLC or generate 43.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.43%
Values	Daily Returns

Flutter Entertainment PLC  vs.  PlayAGS

Flutter Entertainment PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flutter Entertainment PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Flutter Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PlayAGS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PlayAGS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Flutter Entertainment and PlayAGS

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

The idea behind Flutter Entertainment PLC and PlayAGS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.