Correlation Between Flutter Entertainment and PENINSULA ENERG

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

Diversification Opportunities for Flutter Entertainment and PENINSULA ENERG

-0.93

Correlation Coefficient

Flutter Entertainment  PENINSULA ENERG

Pay attention - limited upside

The 3 months correlation between Flutter and PENINSULA is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and PENINSULA ENERG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENINSULA ENERG 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 PENINSULA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENINSULA ENERG has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and PENINSULA ENERG go up and down completely randomly.

Pair Corralation between Flutter Entertainment and PENINSULA ENERG

Assuming the 90 days trading horizon Flutter Entertainment is expected to generate 3.37 times less return on investment than PENINSULA ENERG. But when comparing it to its historical volatility, Flutter Entertainment PLC is 3.42 times less risky than PENINSULA ENERG. It trades about 0.07 of its potential returns per unit of risk. PENINSULA ENERG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  73.00  in PENINSULA ENERG on September 22, 2024 and sell it today you would earn a total of  4.00  from holding PENINSULA ENERG or generate 5.48% return on investment over 90 days.

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

Flutter Entertainment PLC  vs.  PENINSULA ENERG

Flutter Entertainment PLC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment PLC are ranked lower than 12 (%) 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.

PENINSULA ENERG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PENINSULA ENERG 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Flutter Entertainment and PENINSULA ENERG

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

The idea behind Flutter Entertainment PLC and PENINSULA ENERG 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.