Correlation Between Flutter Entertainment and CBRE Group

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

Diversification Opportunities for Flutter Entertainment and CBRE Group

0.76

Correlation Coefficient

Flutter Entertainment  CBRE Group

Poor diversification

The 3 months correlation between Flutter and CBRE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and CBRE Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE Group Class 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 CBRE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE Group Class has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and CBRE Group go up and down completely randomly.

Pair Corralation between Flutter Entertainment and CBRE Group

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 1.24 times more return on investment than CBRE Group. However, Flutter Entertainment is 1.24 times more volatile than CBRE Group Class. It trades about 0.06 of its potential returns per unit of risk. CBRE Group Class is currently generating about 0.07 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	Significant
Accuracy	100.0%
Values	Daily Returns

Flutter Entertainment PLC  vs.  CBRE Group Class

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 fragile basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

CBRE Group Class

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CBRE Group Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CBRE Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Flutter Entertainment and CBRE Group

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

The idea behind Flutter Entertainment PLC and CBRE Group Class 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.