Correlation Between 888 Holdings and PointsBet Holdings

Can any of the company-specific risk be diversified away by investing in both 888 Holdings 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 888 Holdings and PointsBet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 888 Holdings and PointsBet Holdings Limited, you can compare the effects of market volatilities on 888 Holdings 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 888 Holdings with a short position of PointsBet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 888 Holdings and PointsBet Holdings.

Diversification Opportunities for 888 Holdings and PointsBet Holdings

-0.56

Correlation Coefficient

888 Holdings  PointsBet Holdings

Excellent diversification

The 3 months correlation between 888 and PointsBet is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding 888 Holdings and PointsBet Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PointsBet Holdings and 888 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 888 Holdings 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 888 Holdings i.e., 888 Holdings and PointsBet Holdings go up and down completely randomly.

Pair Corralation between 888 Holdings and PointsBet Holdings

Assuming the 90 days horizon 888 Holdings is expected to generate 3.75 times less return on investment than PointsBet Holdings. But when comparing it to its historical volatility, 888 Holdings is 2.27 times less risky than PointsBet Holdings. It trades about 0.05 of its potential returns per unit of risk. PointsBet Holdings Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  60.00  in PointsBet Holdings Limited on December 29, 2024 and sell it today you would earn a total of  11.00  from holding PointsBet Holdings Limited or generate 18.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.49%
Values	Daily Returns

888 Holdings  vs.  PointsBet Holdings Limited

888 Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 888 Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, 888 Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PointsBet Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PointsBet Holdings Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, PointsBet Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 888 Holdings and PointsBet Holdings

The main advantage of trading using opposite 888 Holdings and PointsBet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 888 Holdings 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 888 Holdings and PointsBet Holdings Limited 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 CEOs Directory module to screen CEOs from public companies around the world.