Correlation Between Flutter Entertainment and Ryanair Holdings

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

Diversification Opportunities for Flutter Entertainment and Ryanair Holdings

0.71

Correlation Coefficient

Flutter Entertainment  Ryanair Holdings

Poor diversification

The 3 months correlation between Flutter and Ryanair is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Ryanair Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryanair Holdings 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 Ryanair Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryanair Holdings plc has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Ryanair Holdings go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Ryanair Holdings

Assuming the 90 days trading horizon Flutter Entertainment PLC is expected to generate 0.65 times more return on investment than Ryanair Holdings. However, Flutter Entertainment PLC is 1.54 times less risky than Ryanair Holdings. It trades about 0.3 of its potential returns per unit of risk. Ryanair Holdings plc is currently generating about 0.14 per unit of risk. If you would invest  19,225  in Flutter Entertainment PLC on April 22, 2025 and sell it today you would earn a total of  6,925  from holding Flutter Entertainment PLC or generate 36.02% return on investment over 90 days.

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

Flutter Entertainment PLC  vs.  Ryanair Holdings 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 fragile basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ryanair Holdings plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Ryanair Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and Ryanair Holdings

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

The idea behind Flutter Entertainment PLC and Ryanair Holdings 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.