Correlation Between Flutter Entertainment and Griffon

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

Diversification Opportunities for Flutter Entertainment and Griffon

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Flutter and Griffon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Griffon go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Griffon

Assuming the 90 days trading horizon Flutter Entertainment is expected to generate 1.31 times less return on investment than Griffon. But when comparing it to its historical volatility, Flutter Entertainment PLC is 1.12 times less risky than Griffon. It trades about 0.07 of its potential returns per unit of risk. Griffon is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,932  in Griffon on September 19, 2024 and sell it today you would earn a total of  4,518  from holding Griffon or generate 154.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.8%
ValuesDaily Returns

Flutter Entertainment PLC  vs.  Griffon

 Performance 
       Timeline  
Flutter Entertainment PLC 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment PLC are ranked lower than 13 (%) 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.
Griffon 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Griffon reported solid returns over the last few months and may actually be approaching a breakup point.

Flutter Entertainment and Griffon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Flutter Entertainment and Griffon

The main advantage of trading using opposite Flutter Entertainment and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flutter Entertainment position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.
The idea behind Flutter Entertainment PLC and Griffon 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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