Correlation Between GreenTree Hospitality and Flutter Entertainment

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

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

Diversification Opportunities for GreenTree Hospitality and Flutter Entertainment

0.79

Correlation Coefficient

GreenTree Hospitality  Flutter Entertainment

Poor diversification

The 3 months correlation between GreenTree and Flutter is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality 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 GreenTree Hospitality 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 GreenTree Hospitality 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 GreenTree Hospitality i.e., GreenTree Hospitality and Flutter Entertainment go up and down completely randomly.

Pair Corralation between GreenTree Hospitality and Flutter Entertainment

Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the Flutter Entertainment. In addition to that, GreenTree Hospitality is 1.28 times more volatile than Flutter Entertainment plc. It trades about -0.05 of its total potential returns per unit of risk. Flutter Entertainment plc is currently generating about 0.05 per unit of volatility. If you would invest  18,312  in Flutter Entertainment plc on May 2, 2025 and sell it today you would earn a total of  12,090  from holding Flutter Entertainment plc or generate 66.02% return on investment over 90 days.

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

GreenTree Hospitality Group  vs.  Flutter Entertainment plc

GreenTree Hospitality

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GreenTree Hospitality Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical indicators, GreenTree Hospitality may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Flutter Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenTree Hospitality and Flutter Entertainment

The main advantage of trading using opposite GreenTree Hospitality and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality 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 GreenTree Hospitality 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.