Correlation Between BlueScope Steel and Flutter Entertainment
Can any of the company-specific risk be diversified away by investing in both BlueScope Steel 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 BlueScope Steel and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlueScope Steel Ltd and Flutter Entertainment plc, you can compare the effects of market volatilities on BlueScope Steel 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 BlueScope Steel with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueScope Steel and Flutter Entertainment.
Diversification Opportunities for BlueScope Steel and Flutter Entertainment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BlueScope and Flutter is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BlueScope Steel Ltd 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 BlueScope Steel 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 BlueScope Steel Ltd 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 BlueScope Steel i.e., BlueScope Steel and Flutter Entertainment go up and down completely randomly.
Pair Corralation between BlueScope Steel and Flutter Entertainment
Assuming the 90 days horizon BlueScope Steel is expected to generate 1.48 times less return on investment than Flutter Entertainment. In addition to that, BlueScope Steel is 1.24 times more volatile than Flutter Entertainment plc. It trades about 0.03 of its total potential returns per unit of risk. Flutter Entertainment plc is currently generating about 0.05 per unit of volatility. If you would invest 19,935 in Flutter Entertainment plc on April 19, 2025 and sell it today you would earn a total of 10,875 from holding Flutter Entertainment plc or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.31% |
| Values | Daily Returns |
BlueScope Steel Ltd vs. Flutter Entertainment plc
Performance |
| Timeline |
| BlueScope Steel |
| Flutter Entertainment plc |
BlueScope Steel and Flutter Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueScope Steel and Flutter Entertainment
The main advantage of trading using opposite BlueScope Steel and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueScope Steel 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.| BlueScope Steel vs. Aperam PK | BlueScope Steel vs. Acerinox SA ADR | BlueScope Steel vs. Algoma Steel Group | BlueScope Steel vs. Synalloy |
| Flutter Entertainment vs. Village Super Market | Flutter Entertainment vs. Lifeway Foods | Flutter Entertainment vs. Ambev SA ADR | Flutter Entertainment vs. SunOpta |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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