Correlation Between Betmakers Technology and PointsBet Holdings

Can any of the company-specific risk be diversified away by investing in both Betmakers Technology 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 Betmakers Technology and PointsBet Holdings 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 PointsBet Holdings Limited, you can compare the effects of market volatilities on Betmakers Technology 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 Betmakers Technology with a short position of PointsBet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betmakers Technology and PointsBet Holdings.

Diversification Opportunities for Betmakers Technology and PointsBet Holdings

0.35

Correlation Coefficient

Betmakers Technology  PointsBet Holdings

Weak diversification

The 3 months correlation between Betmakers and PointsBet is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Betmakers Technology Group and PointsBet Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PointsBet Holdings 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 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 Betmakers Technology i.e., Betmakers Technology and PointsBet Holdings go up and down completely randomly.

Pair Corralation between Betmakers Technology and PointsBet Holdings

Assuming the 90 days horizon Betmakers Technology Group is expected to generate 0.88 times more return on investment than PointsBet Holdings. However, Betmakers Technology Group is 1.13 times less risky than PointsBet Holdings. It trades about 0.15 of its potential returns per unit of risk. PointsBet Holdings Limited is currently generating about -0.04 per unit of risk. If you would invest  5.14  in Betmakers Technology Group on October 21, 2024 and sell it today you would earn a total of  1.43  from holding Betmakers Technology Group or generate 27.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.74%
Values	Daily Returns

Betmakers Technology Group  vs.  PointsBet Holdings Limited

Betmakers Technology

Risk-Adjusted Performance

9 of 100

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.

PointsBet Holdings

Risk-Adjusted Performance

7 of 100

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 Betmakers Technology and PointsBet Holdings

The main advantage of trading using opposite Betmakers Technology and PointsBet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betmakers Technology 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 Betmakers Technology Group 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 Stocks Directory module to find actively traded stocks across global markets.