Correlation Between PointsBet Holdings and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both PointsBet Holdings and Esports 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 PointsBet Holdings and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PointsBet Holdings Limited and Esports Entertainment Group, you can compare the effects of market volatilities on PointsBet Holdings and Esports 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 PointsBet Holdings with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PointsBet Holdings and Esports Entertainment.
Diversification Opportunities for PointsBet Holdings and Esports Entertainment
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PointsBet and Esports is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding PointsBet Holdings Limited and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment 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 Limited are associated (or correlated) with Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of PointsBet Holdings i.e., PointsBet Holdings and Esports Entertainment go up and down completely randomly.
Pair Corralation between PointsBet Holdings and Esports Entertainment
Assuming the 90 days horizon PointsBet Holdings Limited is expected to generate 4.55 times more return on investment than Esports Entertainment. However, PointsBet Holdings is 4.55 times more volatile than Esports Entertainment Group. It trades about 0.11 of its potential returns per unit of risk. Esports Entertainment Group is currently generating about -0.33 per unit of risk. If you would invest 44.00 in PointsBet Holdings Limited on October 24, 2024 and sell it today you would earn a total of 11.00 from holding PointsBet Holdings Limited or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.2% |
| Values | Daily Returns |
PointsBet Holdings Limited vs. Esports Entertainment Group
Performance |
| Timeline |
| PointsBet Holdings |
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PointsBet Holdings and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PointsBet Holdings and Esports Entertainment
The main advantage of trading using opposite PointsBet Holdings and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PointsBet Holdings position performs unexpectedly, Esports 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 Esports Entertainment will offset losses from the drop in Esports Entertainment's long position.| PointsBet Holdings vs. Entain DRC PLC | PointsBet Holdings vs. 888 Holdings | PointsBet Holdings vs. Intema Solutions | PointsBet Holdings vs. Royal Wins |
| Esports Entertainment vs. Rush Street Interactive | Esports Entertainment vs. Everi Holdings | Esports Entertainment vs. Inspired Entertainment | Esports Entertainment vs. PointsBet Holdings Limited |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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