Correlation Between Red Rock and Flutter Entertainment

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

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

Diversification Opportunities for Red Rock and Flutter Entertainment

0.91

Correlation Coefficient

Red Rock  Flutter Entertainment

Almost no diversification

The 3 months correlation between Red and Flutter is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Red Rock Resorts 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 Red Rock 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 Red Rock Resorts 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 Red Rock i.e., Red Rock and Flutter Entertainment go up and down completely randomly.

Pair Corralation between Red Rock and Flutter Entertainment

Considering the 90-day investment horizon Red Rock Resorts is expected to generate 1.09 times more return on investment than Flutter Entertainment. However, Red Rock is 1.09 times more volatile than Flutter Entertainment plc. It trades about 0.24 of its potential returns per unit of risk. Flutter Entertainment plc is currently generating about 0.26 per unit of risk. If you would invest  4,074  in Red Rock Resorts on April 24, 2025 and sell it today you would earn a total of  1,352  from holding Red Rock Resorts or generate 33.19% return on investment over 90 days.

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

Red Rock Resorts  vs.  Flutter Entertainment plc

Red Rock Resorts

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Red Rock Resorts are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Red Rock reported solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Red Rock and Flutter Entertainment

The main advantage of trading using opposite Red Rock and Flutter Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Rock 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 Red Rock Resorts 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.