Correlation Between PointsBet Holdings and Entain Plc
Can any of the company-specific risk be diversified away by investing in both PointsBet Holdings and Entain Plc 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 Entain Plc 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 Entain Plc, you can compare the effects of market volatilities on PointsBet Holdings and Entain Plc 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 Entain Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PointsBet Holdings and Entain Plc.
Diversification Opportunities for PointsBet Holdings and Entain Plc
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PointsBet and Entain is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PointsBet Holdings Limited and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc 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 Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of PointsBet Holdings i.e., PointsBet Holdings and Entain Plc go up and down completely randomly.
Pair Corralation between PointsBet Holdings and Entain Plc
Assuming the 90 days horizon PointsBet Holdings Limited is expected to generate 8.23 times more return on investment than Entain Plc. However, PointsBet Holdings is 8.23 times more volatile than Entain Plc. It trades about 0.09 of its potential returns per unit of risk. Entain Plc is currently generating about -0.03 per unit of risk. If you would invest 46.00 in PointsBet Holdings Limited on August 28, 2024 and sell it today you would earn a total of 13.00 from holding PointsBet Holdings Limited or generate 28.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.8% |
| Values | Daily Returns |
PointsBet Holdings Limited vs. Entain Plc
Performance |
| Timeline |
| PointsBet Holdings |
| Entain Plc |
PointsBet Holdings and Entain Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PointsBet Holdings and Entain Plc
The main advantage of trading using opposite PointsBet Holdings and Entain Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PointsBet Holdings position performs unexpectedly, Entain Plc 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 Entain Plc will offset losses from the drop in Entain Plc's long position.| PointsBet Holdings vs. Entain DRC PLC | PointsBet Holdings vs. 888 Holdings | PointsBet Holdings vs. Intema Solutions | PointsBet Holdings vs. Royal Wins |
| Entain Plc vs. Real Luck Group | Entain Plc vs. Betmakers Technology Group | Entain Plc vs. Jackpot Digital |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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