Correlation Between PointsBet Holdings and Accel Entertainment

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

Diversification Opportunities for PointsBet Holdings and Accel Entertainment

0.54

Correlation Coefficient

PointsBet Holdings  Accel Entertainment

Very weak diversification

The 3 months correlation between PointsBet and Accel is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PointsBet Holdings Limited and Accel Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Entertainment 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 Accel Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Entertainment has no effect on the direction of PointsBet Holdings i.e., PointsBet Holdings and Accel Entertainment go up and down completely randomly.

Pair Corralation between PointsBet Holdings and Accel Entertainment

Assuming the 90 days horizon PointsBet Holdings Limited is expected to under-perform the Accel Entertainment. In addition to that, PointsBet Holdings is 3.72 times more volatile than Accel Entertainment. It trades about -0.22 of its total potential returns per unit of risk. Accel Entertainment is currently generating about -0.16 per unit of volatility. If you would invest  1,156  in Accel Entertainment on February 22, 2024 and sell it today you would lose (146.00) from holding Accel Entertainment or give up 12.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	66.67%
Values	Daily Returns

PointsBet Holdings Limited  vs.  Accel Entertainment

PointsBet Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PointsBet Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Accel Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accel Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Accel Entertainment is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PointsBet Holdings and Accel Entertainment

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

The idea behind PointsBet Holdings Limited and Accel Entertainment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .