Correlation Between EIDESVIK OFFSHORE and Flutter Entertainment

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

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

Diversification Opportunities for EIDESVIK OFFSHORE and Flutter Entertainment

0.34

Correlation Coefficient

EIDESVIK OFFSHORE  Flutter Entertainment

Weak diversification

The 3 months correlation between EIDESVIK and Flutter is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK 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 EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK 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 EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and Flutter Entertainment go up and down completely randomly.

Pair Corralation between EIDESVIK OFFSHORE and Flutter Entertainment

Assuming the 90 days horizon EIDESVIK OFFSHORE is expected to generate 1.55 times less return on investment than Flutter Entertainment. In addition to that, EIDESVIK OFFSHORE is 1.98 times more volatile than Flutter Entertainment PLC. It trades about 0.08 of its total potential returns per unit of risk. Flutter Entertainment PLC is currently generating about 0.25 per unit of volatility. If you would invest  20,060  in Flutter Entertainment PLC on April 25, 2025 and sell it today you would earn a total of  5,730  from holding Flutter Entertainment PLC or generate 28.56% return on investment over 90 days.

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

EIDESVIK OFFSHORE NK  vs.  Flutter Entertainment PLC

EIDESVIK OFFSHORE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EIDESVIK OFFSHORE NK are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, EIDESVIK OFFSHORE reported solid returns over the last few months and may actually be approaching a breakup point.

Flutter Entertainment PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment PLC are ranked lower than 19 (%) 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.

Pair Trading with EIDESVIK OFFSHORE and Flutter Entertainment

The main advantage of trading using opposite EIDESVIK OFFSHORE and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.