Correlation Between Flutter Entertainment and Carriage Services

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

Diversification Opportunities for Flutter Entertainment and Carriage Services

0.85

Correlation Coefficient

Flutter Entertainment  Carriage Services

Very poor diversification

The 3 months correlation between Flutter and Carriage is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and Carriage Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriage Services 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 Carriage Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriage Services has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Carriage Services go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Carriage Services

Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 1.4 times more return on investment than Carriage Services. However, Flutter Entertainment is 1.4 times more volatile than Carriage Services. It trades about 0.22 of its potential returns per unit of risk. Carriage Services is currently generating about 0.16 per unit of risk. If you would invest  23,528  in Flutter Entertainment plc on April 26, 2025 and sell it today you would earn a total of  6,476  from holding Flutter Entertainment plc or generate 27.52% return on investment over 90 days.

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

Flutter Entertainment plc  vs.  Carriage Services

Flutter Entertainment plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment plc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Carriage Services

Risk-Adjusted Performance

Good

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

Pair Trading with Flutter Entertainment and Carriage Services

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

The idea behind Flutter Entertainment plc and Carriage Services 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.