Correlation Between Flutter Entertainment and Anglo American

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

Diversification Opportunities for Flutter Entertainment and Anglo American

-0.56

Correlation Coefficient

Flutter Entertainment  Anglo American

Excellent diversification

The 3 months correlation between Flutter and Anglo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Anglo American plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American plc has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Anglo American go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Anglo American

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.56 times more return on investment than Anglo American. However, Flutter Entertainment PLC is 1.8 times less risky than Anglo American. It trades about 0.23 of its potential returns per unit of risk. Anglo American plc is currently generating about -0.02 per unit of risk. If you would invest  20,210  in Flutter Entertainment PLC on April 24, 2025 and sell it today you would earn a total of  5,340  from holding Flutter Entertainment PLC or generate 26.42% 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.  Anglo American 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 18 (%) 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.

Anglo American plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anglo American plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Anglo American is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Flutter Entertainment and Anglo American

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

The idea behind Flutter Entertainment PLC and Anglo American 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.