Correlation Between Flutter Entertainment and Ferrexpo PLC

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

Diversification Opportunities for Flutter Entertainment and Ferrexpo PLC

-0.47

Correlation Coefficient

Flutter Entertainment  Ferrexpo PLC

Very good diversification

The 3 months correlation between Flutter and Ferrexpo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Ferrexpo PLC go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Ferrexpo PLC

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.35 times more return on investment than Ferrexpo PLC. However, Flutter Entertainment PLC is 2.85 times less risky than Ferrexpo PLC. It trades about 0.3 of its potential returns per unit of risk. Ferrexpo PLC is currently generating about 0.01 per unit of risk. If you would invest  1,683,500  in Flutter Entertainment PLC on April 20, 2025 and sell it today you would earn a total of  598,500  from holding Flutter Entertainment PLC or generate 35.55% return on investment over 90 days.

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

Flutter Entertainment PLC  vs.  Ferrexpo PLC

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 23 (%) 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.

Ferrexpo PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ferrexpo PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ferrexpo PLC is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Flutter Entertainment and Ferrexpo PLC

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

The idea behind Flutter Entertainment PLC and Ferrexpo 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.