Correlation Between Betmakers Technology and Entain Plc

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

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

Diversification Opportunities for Betmakers Technology and Entain Plc

-0.64

Correlation Coefficient

Betmakers Technology  Entain Plc

Excellent diversification

The 3 months correlation between Betmakers and Entain is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Betmakers Technology Group and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc and Betmakers Technology 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 Betmakers Technology Group are associated (or correlated) with Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of Betmakers Technology i.e., Betmakers Technology and Entain Plc go up and down completely randomly.

Pair Corralation between Betmakers Technology and Entain Plc

Assuming the 90 days horizon Betmakers Technology Group is expected to generate 1.21 times more return on investment than Entain Plc. However, Betmakers Technology is 1.21 times more volatile than Entain Plc. It trades about 0.03 of its potential returns per unit of risk. Entain Plc is currently generating about 0.0 per unit of risk. If you would invest  6.00  in Betmakers Technology Group on December 7, 2024 and sell it today you would earn a total of  0.57  from holding Betmakers Technology Group or generate 9.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.01%
Values	Daily Returns

Betmakers Technology Group  vs.  Entain Plc

Betmakers Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Betmakers Technology Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Betmakers Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Entain Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entain Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

Pair Trading with Betmakers Technology and Entain Plc

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

The idea behind Betmakers Technology Group and Entain Plc 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.