Correlation Between Power Integrations and Flutter Entertainment

Can any of the company-specific risk be diversified away by investing in both Power Integrations and Flutter Entertainment 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 Power Integrations and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Power Integrations and Flutter Entertainment PLC, you can compare the effects of market volatilities on Power Integrations and Flutter Entertainment 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 Power Integrations with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Integrations and Flutter Entertainment.

Diversification Opportunities for Power Integrations and Flutter Entertainment

0.62

Correlation Coefficient

Power Integrations  Flutter Entertainment

Poor diversification

The 3 months correlation between Power and Flutter is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Power Integrations and Flutter Entertainment PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment PLC and Power Integrations 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 Power Integrations are associated (or correlated) with Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment PLC has no effect on the direction of Power Integrations i.e., Power Integrations and Flutter Entertainment go up and down completely randomly.

Pair Corralation between Power Integrations and Flutter Entertainment

Assuming the 90 days horizon Power Integrations is expected to generate 1.01 times more return on investment than Flutter Entertainment. However, Power Integrations is 1.01 times more volatile than Flutter Entertainment PLC. It trades about -0.07 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about -0.09 per unit of risk. If you would invest  5,881  in Power Integrations on December 22, 2024 and sell it today you would lose (631.00) from holding Power Integrations or give up 10.73% of portfolio value over 90 days.

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

Power Integrations  vs.  Flutter Entertainment PLC

Power Integrations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Power Integrations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 fragile 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.

Pair Trading with Power Integrations and Flutter Entertainment

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

The idea behind Power Integrations and Flutter Entertainment PLC 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.