Correlation Between Flutter Entertainment and Universal Electronics
Can any of the company-specific risk be diversified away by investing in both Flutter Entertainment and Universal Electronics 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 Universal Electronics 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 Universal Electronics, you can compare the effects of market volatilities on Flutter Entertainment and Universal Electronics 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 Universal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flutter Entertainment and Universal Electronics.
Diversification Opportunities for Flutter Entertainment and Universal Electronics
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flutter and Universal is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Universal Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Electronics 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 Universal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Electronics has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Universal Electronics go up and down completely randomly.
Pair Corralation between Flutter Entertainment and Universal Electronics
Given the investment horizon of 90 days Flutter Entertainment is expected to generate 1.61 times less return on investment than Universal Electronics. But when comparing it to its historical volatility, Flutter Entertainment plc is 2.26 times less risky than Universal Electronics. It trades about 0.2 of its potential returns per unit of risk. Universal Electronics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 493.00 in Universal Electronics on April 10, 2025 and sell it today you would earn a total of 182.00 from holding Universal Electronics or generate 36.92% 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. Universal Electronics
Performance |
| Timeline |
| Flutter Entertainment plc |
| Universal Electronics |
Flutter Entertainment and Universal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flutter Entertainment and Universal Electronics
The main advantage of trading using opposite Flutter Entertainment and Universal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Universal Electronics 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 Universal Electronics will offset losses from the drop in Universal Electronics' long position.| Flutter Entertainment vs. Global Net Lease | Flutter Entertainment vs. Antero Midstream Partners | Flutter Entertainment vs. PROG Holdings | Flutter Entertainment vs. American Electric Power |
| Universal Electronics vs. CF Industries Holdings | Universal Electronics vs. Afya | Universal Electronics vs. Sensient Technologies | Universal Electronics vs. Sealed Air |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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