Correlation Between Flutter Entertainment and Wendys

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

Diversification Opportunities for Flutter Entertainment and Wendys

-0.7

Correlation Coefficient

Flutter Entertainment  Wendys

Excellent diversification

The 3 months correlation between Flutter and Wendys is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Flutter Entertainment plc and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Flutter Entertainment i.e., Flutter Entertainment and Wendys go up and down completely randomly.

Pair Corralation between Flutter Entertainment and Wendys

Given the investment horizon of 90 days Flutter Entertainment plc is expected to generate 0.85 times more return on investment than Wendys. However, Flutter Entertainment plc is 1.17 times less risky than Wendys. It trades about 0.14 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.09 per unit of risk. If you would invest  24,935  in Flutter Entertainment plc on May 19, 2025 and sell it today you would earn a total of  4,396  from holding Flutter Entertainment plc or generate 17.63% return on investment over 90 days.

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

Flutter Entertainment plc  vs.  The Wendys Co

Flutter Entertainment plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flutter Entertainment plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

The Wendys

Risk-Adjusted Performance

Weakest

Over the last 90 days The Wendys Co 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 technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Flutter Entertainment and Wendys

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

The idea behind Flutter Entertainment plc and The Wendys Co 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 Stocks Directory module to find actively traded stocks across global markets.