Correlation Between Flutter Entertainment and Nomura Holdings

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

Diversification Opportunities for Flutter Entertainment and Nomura Holdings

0.42

Correlation Coefficient

Flutter Entertainment  Nomura Holdings

Very weak diversification

The 3 months correlation between Flutter and Nomura is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Nomura Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings 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 Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Nomura Holdings go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Nomura Holdings

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to under-perform the Nomura Holdings. In addition to that, Flutter Entertainment is 1.01 times more volatile than Nomura Holdings. It trades about -0.09 of its total potential returns per unit of risk. Nomura Holdings is currently generating about 0.05 per unit of volatility. If you would invest  548.00  in Nomura Holdings on December 22, 2024 and sell it today you would earn a total of  32.00  from holding Nomura Holdings or generate 5.84% 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.  Nomura Holdings

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. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nomura Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nomura Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Flutter Entertainment and Nomura Holdings

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

The idea behind Flutter Entertainment PLC and Nomura Holdings 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.