Correlation Between Kambi Group and PointsBet Holdings

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Can any of the company-specific risk be diversified away by investing in both Kambi Group 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 Kambi Group and PointsBet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kambi Group plc and PointsBet Holdings Limited, you can compare the effects of market volatilities on Kambi Group 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 Kambi Group with a short position of PointsBet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kambi Group and PointsBet Holdings.

Diversification Opportunities for Kambi Group and PointsBet Holdings

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Kambi and PointsBet is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kambi Group plc and PointsBet Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PointsBet Holdings and Kambi Group 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 Kambi Group plc 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 Kambi Group i.e., Kambi Group and PointsBet Holdings go up and down completely randomly.

Pair Corralation between Kambi Group and PointsBet Holdings

Assuming the 90 days horizon Kambi Group plc is expected to under-perform the PointsBet Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kambi Group plc is 2.07 times less risky than PointsBet Holdings. The pink sheet trades about -0.13 of its potential returns per unit of risk. The PointsBet Holdings Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  50.00  in PointsBet Holdings Limited on September 26, 2024 and sell it today you would earn a total of  12.00  from holding PointsBet Holdings Limited or generate 24.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy68.25%
ValuesDaily Returns

Kambi Group plc  vs.  PointsBet Holdings Limited

 Performance 
       Timeline  
Kambi Group plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kambi Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
PointsBet Holdings 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PointsBet Holdings Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, PointsBet Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Kambi Group and PointsBet Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kambi Group and PointsBet Holdings

The main advantage of trading using opposite Kambi Group and PointsBet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kambi Group 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 Kambi Group plc 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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