Correlation Between World Poker and PointsBet Holdings

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

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

Diversification Opportunities for World Poker and PointsBet Holdings

-0.74

Correlation Coefficient

World Poker  PointsBet Holdings

Pay attention - limited upside

The 3 months correlation between World and PointsBet is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding World Poker Fund and PointsBet Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PointsBet Holdings and World Poker 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 World Poker Fund 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 World Poker i.e., World Poker and PointsBet Holdings go up and down completely randomly.

Pair Corralation between World Poker and PointsBet Holdings

Given the investment horizon of 90 days World Poker Fund is expected to under-perform the PointsBet Holdings. In addition to that, World Poker is 2.33 times more volatile than PointsBet Holdings Limited. It trades about -0.04 of its total potential returns per unit of risk. PointsBet Holdings Limited is currently generating about 0.09 per unit of volatility. If you would invest  48.00  in PointsBet Holdings Limited on September 27, 2024 and sell it today you would earn a total of  9.00  from holding PointsBet Holdings Limited or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	68.25%
Values	Daily Returns

World Poker Fund  vs.  PointsBet Holdings Limited

World Poker Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Poker Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 fragile technical indicators, PointsBet Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with World Poker and PointsBet Holdings

The main advantage of trading using opposite World Poker and PointsBet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Poker 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 World Poker Fund 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.