Correlation Between Golden Heaven and Flutter Entertainment

Can any of the company-specific risk be diversified away by investing in both Golden Heaven and Flutter Entertainment 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 Golden Heaven and Flutter Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Golden Heaven Group and Flutter Entertainment plc, you can compare the effects of market volatilities on Golden Heaven and Flutter Entertainment 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 Golden Heaven with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Heaven and Flutter Entertainment.

Diversification Opportunities for Golden Heaven and Flutter Entertainment

-0.16

Correlation Coefficient

Golden Heaven  Flutter Entertainment

Good diversification

The 3 months correlation between Golden and Flutter is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Golden Heaven Group and Flutter Entertainment plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment plc and Golden Heaven 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 Golden Heaven Group are associated (or correlated) with Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment plc has no effect on the direction of Golden Heaven i.e., Golden Heaven and Flutter Entertainment go up and down completely randomly.

Pair Corralation between Golden Heaven and Flutter Entertainment

Given the investment horizon of 90 days Golden Heaven Group is expected to generate 12.28 times more return on investment than Flutter Entertainment. However, Golden Heaven is 12.28 times more volatile than Flutter Entertainment plc. It trades about 0.09 of its potential returns per unit of risk. Flutter Entertainment plc is currently generating about -0.14 per unit of risk. If you would invest  101.00  in Golden Heaven Group on January 7, 2025 and sell it today you would lose (66.00) from holding Golden Heaven Group or give up 65.35% of portfolio value over 90 days.

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

Golden Heaven Group  vs.  Flutter Entertainment plc

Golden Heaven Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Heaven Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Flutter Entertainment plc

Risk-Adjusted Performance

Very Weak

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Golden Heaven and Flutter Entertainment

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

The idea behind Golden Heaven Group and Flutter Entertainment plc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.