Correlation Between Flutter Entertainment and OAKRIDGE INTERNATIONAL

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

Diversification Opportunities for Flutter Entertainment and OAKRIDGE INTERNATIONAL

0.24

Correlation Coefficient

Flutter Entertainment  OAKRIDGE INTERNATIONAL

Modest diversification

The 3 months correlation between Flutter and OAKRIDGE is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and OAKRIDGE INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKRIDGE INTERNATIONAL 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 OAKRIDGE INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKRIDGE INTERNATIONAL has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and OAKRIDGE INTERNATIONAL go up and down completely randomly.

Pair Corralation between Flutter Entertainment and OAKRIDGE INTERNATIONAL

Assuming the 90 days trading horizon Flutter Entertainment is expected to generate 4.45 times less return on investment than OAKRIDGE INTERNATIONAL. But when comparing it to its historical volatility, Flutter Entertainment PLC is 5.6 times less risky than OAKRIDGE INTERNATIONAL. It trades about 0.06 of its potential returns per unit of risk. OAKRIDGE INTERNATIONAL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5.55  in OAKRIDGE INTERNATIONAL on October 24, 2024 and sell it today you would lose (2.70) from holding OAKRIDGE INTERNATIONAL or give up 48.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Flutter Entertainment PLC  vs.  OAKRIDGE INTERNATIONAL

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.

OAKRIDGE INTERNATIONAL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OAKRIDGE INTERNATIONAL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, OAKRIDGE INTERNATIONAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Flutter Entertainment and OAKRIDGE INTERNATIONAL

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

The idea behind Flutter Entertainment PLC and OAKRIDGE INTERNATIONAL 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.