Correlation Between Aristocrat Leisure and PointsBet Holdings
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and PointsBet Holdings 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 Aristocrat Leisure and PointsBet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and PointsBet Holdings Limited, you can compare the effects of market volatilities on Aristocrat Leisure and PointsBet Holdings 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 Aristocrat Leisure with a short position of PointsBet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and PointsBet Holdings.
Diversification Opportunities for Aristocrat Leisure and PointsBet Holdings
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aristocrat and PointsBet is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and PointsBet Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PointsBet Holdings and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with PointsBet Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PointsBet Holdings has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and PointsBet Holdings go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and PointsBet Holdings
Assuming the 90 days horizon Aristocrat Leisure is expected to generate 7.94 times less return on investment than PointsBet Holdings. But when comparing it to its historical volatility, Aristocrat Leisure Limited is 4.05 times less risky than PointsBet Holdings. It trades about 0.1 of its potential returns per unit of risk. PointsBet Holdings Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 33.00 in PointsBet Holdings Limited on August 31, 2024 and sell it today you would earn a total of 29.00 from holding PointsBet Holdings Limited or generate 87.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. PointsBet Holdings Limited
Performance |
| Timeline |
| Aristocrat Leisure |
| PointsBet Holdings |
Aristocrat Leisure and PointsBet Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and PointsBet Holdings
The main advantage of trading using opposite Aristocrat Leisure and PointsBet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, PointsBet Holdings 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 PointsBet Holdings will offset losses from the drop in PointsBet Holdings' long position.| Aristocrat Leisure vs. Amadeus IT Group | Aristocrat Leisure vs. LAir Liquide SA | Aristocrat Leisure vs. ASSA ABLOY AB | Aristocrat Leisure vs. Relx PLC |
| PointsBet Holdings vs. Entain DRC PLC | PointsBet Holdings vs. 888 Holdings | PointsBet Holdings vs. Intema Solutions | PointsBet Holdings vs. Royal Wins |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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