Correlation Between PointsBet Holdings and Rush Street

Can any of the company-specific risk be diversified away by investing in both PointsBet Holdings and Rush Street 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 Rush Street 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 Rush Street Interactive, you can compare the effects of market volatilities on PointsBet Holdings and Rush Street 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 Rush Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of PointsBet Holdings and Rush Street.

Diversification Opportunities for PointsBet Holdings and Rush Street

-0.02

Correlation Coefficient

PointsBet Holdings  Rush Street

Good diversification

The 3 months correlation between PointsBet and Rush is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PointsBet Holdings Limited and Rush Street Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rush Street Interactive 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 Rush Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rush Street Interactive has no effect on the direction of PointsBet Holdings i.e., PointsBet Holdings and Rush Street go up and down completely randomly.

Pair Corralation between PointsBet Holdings and Rush Street

Assuming the 90 days horizon PointsBet Holdings Limited is expected to under-perform the Rush Street. In addition to that, PointsBet Holdings is 2.08 times more volatile than Rush Street Interactive. It trades about -0.03 of its total potential returns per unit of risk. Rush Street Interactive is currently generating about -0.05 per unit of volatility. If you would invest  1,442  in Rush Street Interactive on November 28, 2024 and sell it today you would lose (153.00) from holding Rush Street Interactive or give up 10.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.14%
Values	Daily Returns

PointsBet Holdings Limited  vs.  Rush Street Interactive

PointsBet Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days PointsBet Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Rush Street Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rush Street Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with PointsBet Holdings and Rush Street

The main advantage of trading using opposite PointsBet Holdings and Rush Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PointsBet Holdings position performs unexpectedly, Rush Street 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 Rush Street will offset losses from the drop in Rush Street's long position.

The idea behind PointsBet Holdings Limited and Rush Street Interactive 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.