Correlation Between Step One and Pointsbet Holdings
Can any of the company-specific risk be diversified away by investing in both Step One 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 Step One and Pointsbet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Step One Clothing and Pointsbet Holdings, you can compare the effects of market volatilities on Step One 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 Step One with a short position of Pointsbet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and Pointsbet Holdings.
Diversification Opportunities for Step One and Pointsbet Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Step and Pointsbet is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing and Pointsbet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pointsbet Holdings and Step One 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 Step One Clothing 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 Step One i.e., Step One and Pointsbet Holdings go up and down completely randomly.
Pair Corralation between Step One and Pointsbet Holdings
Assuming the 90 days trading horizon Step One Clothing is expected to under-perform the Pointsbet Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Step One Clothing is 1.11 times less risky than Pointsbet Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The Pointsbet Holdings is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Pointsbet Holdings on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Pointsbet Holdings or generate 31.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Step One Clothing vs. Pointsbet Holdings
Performance |
| Timeline |
| Step One Clothing |
| Pointsbet Holdings |
Step One and Pointsbet Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Step One and Pointsbet Holdings
The main advantage of trading using opposite Step One and Pointsbet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Step One 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.| Step One vs. WiseTech Global Limited | Step One vs. Red Hill Iron | Step One vs. Champion Iron | Step One vs. Hutchison Telecommunications |
| Pointsbet Holdings vs. Commonwealth Bank of | Pointsbet Holdings vs. IDP Education | Pointsbet Holdings vs. National Australia Bank | Pointsbet Holdings vs. Step One Clothing |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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