Correlation Between Flutter Entertainment and Electronic Arts

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

Diversification Opportunities for Flutter Entertainment and Electronic Arts

0.48

Correlation Coefficient

Flutter Entertainment  Electronic Arts

Very weak diversification

The 3 months correlation between Flutter and Electronic is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment PLC and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Electronic Arts go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Electronic Arts

Assuming the 90 days trading horizon Flutter Entertainment is expected to generate 1.19 times less return on investment than Electronic Arts. In addition to that, Flutter Entertainment is 1.09 times more volatile than Electronic Arts. It trades about 0.13 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.16 per unit of volatility. If you would invest  14,970  in Electronic Arts on May 15, 2025 and sell it today you would earn a total of  2,764  from holding Electronic Arts or generate 18.46% return on investment over 90 days.

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

Flutter Entertainment PLC  vs.  Electronic Arts

Flutter Entertainment PLC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Electronic Arts

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Electronic Arts are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Electronic Arts unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flutter Entertainment and Electronic Arts

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

The idea behind Flutter Entertainment PLC and Electronic Arts 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.