Correlation Between Rush Street and Han Kook
Can any of the company-specific risk be diversified away by investing in both Rush Street and Han Kook 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 Rush Street and Han Kook into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rush Street Interactive and Han Kook Steel, you can compare the effects of market volatilities on Rush Street and Han Kook 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 Rush Street with a short position of Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Han Kook.
Diversification Opportunities for Rush Street and Han Kook
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rush and Han is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Han Kook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Steel and Rush Street 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 Rush Street Interactive are associated (or correlated) with Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Steel has no effect on the direction of Rush Street i.e., Rush Street and Han Kook go up and down completely randomly.
Pair Corralation between Rush Street and Han Kook
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.98 times more return on investment than Han Kook. However, Rush Street is 2.98 times more volatile than Han Kook Steel. It trades about 0.29 of its potential returns per unit of risk. Han Kook Steel is currently generating about -0.14 per unit of risk. If you would invest 1,058 in Rush Street Interactive on August 25, 2024 and sell it today you would earn a total of 274.00 from holding Rush Street Interactive or generate 25.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Han Kook Steel
Performance |
| Timeline |
| Rush Street Interactive |
| Han Kook Steel |
Rush Street and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Han Kook
The main advantage of trading using opposite Rush Street and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Han Kook vs. Dong Il Steel | Han Kook vs. Seah Steel Corp | Han Kook vs. Ajusteel Co | Han Kook vs. Samwon Steel |
Check out your portfolio center.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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