Correlation Between Pointsbet Holdings and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Pointsbet Holdings and Westpac Banking 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 Pointsbet Holdings and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pointsbet Holdings and Westpac Banking, you can compare the effects of market volatilities on Pointsbet Holdings and Westpac Banking 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 Pointsbet Holdings with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pointsbet Holdings and Westpac Banking.
Diversification Opportunities for Pointsbet Holdings and Westpac Banking
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pointsbet and Westpac is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pointsbet Holdings and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Pointsbet Holdings 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 Pointsbet Holdings are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Pointsbet Holdings i.e., Pointsbet Holdings and Westpac Banking go up and down completely randomly.
Pair Corralation between Pointsbet Holdings and Westpac Banking
Assuming the 90 days trading horizon Pointsbet Holdings is expected to generate 9.52 times more return on investment than Westpac Banking. However, Pointsbet Holdings is 9.52 times more volatile than Westpac Banking. It trades about 0.07 of its potential returns per unit of risk. Westpac Banking is currently generating about -0.06 per unit of risk. If you would invest 93.00 in Pointsbet Holdings on September 15, 2024 and sell it today you would earn a total of 3.00 from holding Pointsbet Holdings or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pointsbet Holdings vs. Westpac Banking
Performance |
| Timeline |
| Pointsbet Holdings |
| Westpac Banking |
Pointsbet Holdings and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pointsbet Holdings and Westpac Banking
The main advantage of trading using opposite Pointsbet Holdings and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pointsbet Holdings position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Pointsbet Holdings vs. Bio Gene Technology | Pointsbet Holdings vs. Perseus Mining | Pointsbet Holdings vs. COAST ENTERTAINMENT HOLDINGS | Pointsbet Holdings vs. Globe Metals Mining |
| Westpac Banking vs. ABACUS STORAGE KING | Westpac Banking vs. Odyssey Energy | Westpac Banking vs. Sims | Westpac Banking vs. Pointsbet Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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