Correlation Between Vertiv Holdings and PointsBet Holdings

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

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

Diversification Opportunities for Vertiv Holdings and PointsBet Holdings

-0.26

Correlation Coefficient

Vertiv Holdings  PointsBet Holdings

Very good diversification

The 3 months correlation between Vertiv and PointsBet is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and PointsBet Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PointsBet Holdings and Vertiv 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 Vertiv Holdings Co 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 Vertiv Holdings i.e., Vertiv Holdings and PointsBet Holdings go up and down completely randomly.

Pair Corralation between Vertiv Holdings and PointsBet Holdings

Considering the 90-day investment horizon Vertiv Holdings Co is expected to under-perform the PointsBet Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Vertiv Holdings Co is 1.17 times less risky than PointsBet Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The PointsBet Holdings Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  60.00  in PointsBet Holdings Limited on December 30, 2024 and sell it today you would earn a total of  11.00  from holding PointsBet Holdings Limited or generate 18.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	69.35%
Values	Daily Returns

Vertiv Holdings Co  vs.  PointsBet Holdings Limited

Vertiv Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vertiv Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PointsBet Holdings

Risk-Adjusted Performance

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 Vertiv Holdings and PointsBet Holdings

The main advantage of trading using opposite Vertiv Holdings and PointsBet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings 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 Vertiv Holdings Co 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.