Correlation Between Flutter Entertainment and Inspired Entertainment

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

Diversification Opportunities for Flutter Entertainment and Inspired Entertainment

0.04

Correlation Coefficient

Flutter Entertainment  Inspired Entertainment

Significant diversification

The 3 months correlation between Flutter and Inspired is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Inspired Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspired Entertainment 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 Inspired Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspired Entertainment has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Inspired Entertainment go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Inspired Entertainment

If you would invest  9,812  in Flutter Entertainment PLC on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Flutter Entertainment PLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Flutter Entertainment PLC  vs.  Inspired Entertainment

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.

Inspired Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspired Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Flutter Entertainment and Inspired Entertainment

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

The idea behind Flutter Entertainment PLC and Inspired Entertainment 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.