Correlation Between Pointsbet Holdings and Sims

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

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

Diversification Opportunities for Pointsbet Holdings and Sims

0.59

Correlation Coefficient

Pointsbet Holdings  Sims

Very weak diversification

The 3 months correlation between Pointsbet and Sims is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pointsbet Holdings and Sims in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims 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 are associated (or correlated) with Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims has no effect on the direction of Pointsbet Holdings i.e., Pointsbet Holdings and Sims go up and down completely randomly.

Pair Corralation between Pointsbet Holdings and Sims

Assuming the 90 days trading horizon Pointsbet Holdings is expected to generate 1.71 times more return on investment than Sims. However, Pointsbet Holdings is 1.71 times more volatile than Sims. It trades about 0.32 of its potential returns per unit of risk. Sims is currently generating about 0.16 per unit of risk. If you would invest  49.00  in Pointsbet Holdings on September 4, 2024 and sell it today you would earn a total of  52.00  from holding Pointsbet Holdings or generate 106.12% return on investment over 90 days.

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

Pointsbet Holdings  vs.  Sims

Pointsbet Holdings

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pointsbet Holdings are ranked lower than 24 (%) 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.

Sims

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sims are ranked lower than 12 (%) 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.

Pair Trading with Pointsbet Holdings and Sims

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

The idea behind Pointsbet Holdings and Sims 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.