Correlation Between PointsBet Holdings and Elray Resources

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

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

Diversification Opportunities for PointsBet Holdings and Elray Resources

-0.09

Correlation Coefficient

PointsBet Holdings  Elray Resources

Good diversification

The 3 months correlation between PointsBet and Elray is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PointsBet Holdings Limited and Elray Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elray Resources 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 Limited are associated (or correlated) with Elray Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elray Resources has no effect on the direction of PointsBet Holdings i.e., PointsBet Holdings and Elray Resources go up and down completely randomly.

Pair Corralation between PointsBet Holdings and Elray Resources

Assuming the 90 days horizon PointsBet Holdings Limited is expected to generate 0.95 times more return on investment than Elray Resources. However, PointsBet Holdings Limited is 1.06 times less risky than Elray Resources. It trades about 0.09 of its potential returns per unit of risk. Elray Resources is currently generating about 0.05 per unit of risk. If you would invest  38.00  in PointsBet Holdings Limited on September 23, 2024 and sell it today you would earn a total of  24.00  from holding PointsBet Holdings Limited or generate 63.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.31%
Values	Daily Returns

PointsBet Holdings Limited  vs.  Elray Resources

PointsBet Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PointsBet Holdings Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, PointsBet Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Elray Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elray Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Elray Resources sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PointsBet Holdings and Elray Resources

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

The idea behind PointsBet Holdings Limited and Elray Resources 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.