Correlation Between Rush Street and United Parcel
Can any of the company-specific risk be diversified away by investing in both Rush Street and United Parcel 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 United Parcel 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 United Parcel Service, you can compare the effects of market volatilities on Rush Street and United Parcel 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 United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and United Parcel.
Diversification Opportunities for Rush Street and United Parcel
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and United is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service 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 United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Rush Street i.e., Rush Street and United Parcel go up and down completely randomly.
Pair Corralation between Rush Street and United Parcel
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.41 times more return on investment than United Parcel. However, Rush Street is 2.41 times more volatile than United Parcel Service. It trades about 0.13 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.02 per unit of risk. If you would invest 305.00 in Rush Street Interactive on August 31, 2024 and sell it today you would earn a total of 1,137 from holding Rush Street Interactive or generate 372.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Rush Street Interactive vs. United Parcel Service
Performance |
| Timeline |
| Rush Street Interactive |
| United Parcel Service |
Rush Street and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and United Parcel
The main advantage of trading using opposite Rush Street and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| United Parcel vs. MTI Wireless Edge | United Parcel vs. McEwen Mining | United Parcel vs. Eastinco Mining Exploration | United Parcel vs. International Consolidated Airlines |
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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