Correlation Between Flutter Entertainment and UET United

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

Diversification Opportunities for Flutter Entertainment and UET United

0.52

Correlation Coefficient

Flutter Entertainment  UET United

Very weak diversification

The 3 months correlation between Flutter and UET is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic 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 UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and UET United go up and down completely randomly.

Pair Corralation between Flutter Entertainment and UET United

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.55 times more return on investment than UET United. However, Flutter Entertainment PLC is 1.81 times less risky than UET United. It trades about 0.06 of its potential returns per unit of risk. UET United Electronic is currently generating about 0.02 per unit of risk. If you would invest  14,730  in Flutter Entertainment PLC on October 26, 2024 and sell it today you would earn a total of  10,510  from holding Flutter Entertainment PLC or generate 71.35% return on investment over 90 days.

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

Flutter Entertainment PLC  vs.  UET United Electronic

Flutter Entertainment PLC

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment PLC are ranked lower than 15 (%) 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.

UET United Electronic

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UET United Electronic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, UET United unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and UET United

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

The idea behind Flutter Entertainment PLC and UET United Electronic 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.