Correlation Between Autosports and Pointsbet Holdings

Can any of the company-specific risk be diversified away by investing in both Autosports 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 Autosports and Pointsbet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Autosports Group and Pointsbet Holdings, you can compare the effects of market volatilities on Autosports 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 Autosports with a short position of Pointsbet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Pointsbet Holdings.

Diversification Opportunities for Autosports and Pointsbet Holdings

-0.66

Correlation Coefficient

Autosports  Pointsbet Holdings

Excellent diversification

The 3 months correlation between Autosports and Pointsbet is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Pointsbet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pointsbet Holdings and Autosports 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 Autosports Group 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 Autosports i.e., Autosports and Pointsbet Holdings go up and down completely randomly.

Pair Corralation between Autosports and Pointsbet Holdings

Assuming the 90 days trading horizon Autosports Group is expected to generate 0.72 times more return on investment than Pointsbet Holdings. However, Autosports Group is 1.39 times less risky than Pointsbet Holdings. It trades about -0.08 of its potential returns per unit of risk. Pointsbet Holdings is currently generating about -0.19 per unit of risk. If you would invest  179.00  in Autosports Group on October 26, 2024 and sell it today you would lose (4.00) from holding Autosports Group or give up 2.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Autosports Group  vs.  Pointsbet Holdings

Autosports Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autosports Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pointsbet Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pointsbet Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, Pointsbet Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autosports and Pointsbet Holdings

The main advantage of trading using opposite Autosports and Pointsbet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports 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.

The idea behind Autosports Group and Pointsbet Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.