Correlation Between Flutter Entertainment and BRP

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

Diversification Opportunities for Flutter Entertainment and BRP

FlutterBRPDiversified AwayFlutterBRPDiversified Away100%
-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Flutter and BRP is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc 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 BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and BRP go up and down completely randomly.

Pair Corralation between Flutter Entertainment and BRP

Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 1.02 times more return on investment than BRP. However, Flutter Entertainment is 1.02 times more volatile than BRP Inc. It trades about 0.05 of its potential returns per unit of risk. BRP Inc is currently generating about -0.04 per unit of risk. If you would invest  18,143  in Flutter Entertainment plc on November 27, 2024 and sell it today you would earn a total of  8,883  from holding Flutter Entertainment plc or generate 48.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Flutter Entertainment plc  vs.  BRP Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15FLUT DOOO
       Timeline  
Flutter Entertainment plc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Flutter Entertainment plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Flutter Entertainment is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb250260270280290300
BRP Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days BRP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4244464850525456

Flutter Entertainment and BRP Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.29-3.96-2.64-1.310.02241.342.694.035.38 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15FLUT DOOO
       Returns  

Pair Trading with Flutter Entertainment and BRP

The main advantage of trading using opposite Flutter Entertainment and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, BRP 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 BRP will offset losses from the drop in BRP's long position.
The idea behind Flutter Entertainment plc and BRP Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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