Correlation Between Sims and Pointsbet Holdings

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

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

Diversification Opportunities for Sims and Pointsbet Holdings

0.58

Correlation Coefficient

Sims  Pointsbet Holdings

Very weak diversification

The 3 months correlation between Sims and Pointsbet is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sims and Pointsbet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pointsbet Holdings and Sims 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 Sims 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 Sims i.e., Sims and Pointsbet Holdings go up and down completely randomly.

Pair Corralation between Sims and Pointsbet Holdings

Assuming the 90 days trading horizon Sims is expected to generate 3.24 times less return on investment than Pointsbet Holdings. But when comparing it to its historical volatility, Sims is 1.7 times less risky than Pointsbet Holdings. It trades about 0.17 of its potential returns per unit of risk. Pointsbet Holdings is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Pointsbet Holdings on September 5, 2024 and sell it today you would earn a total of  54.00  from holding Pointsbet Holdings or generate 110.2% return on investment over 90 days.

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

Sims  vs.  Pointsbet Holdings

Sims

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sims are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Sims unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pointsbet Holdings

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pointsbet Holdings are ranked lower than 25 (%) 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 Sims and Pointsbet Holdings

The main advantage of trading using opposite Sims and Pointsbet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims 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 Sims 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.