Correlation Between Rush Street and National Beverage
Can any of the company-specific risk be diversified away by investing in both Rush Street and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on Rush Street and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and National Beverage.
Diversification Opportunities for Rush Street and National Beverage
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and National is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Rush Street i.e., Rush Street and National Beverage go up and down completely randomly.
Pair Corralation between Rush Street and National Beverage
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.91 times more return on investment than National Beverage. However, Rush Street is 1.91 times more volatile than National Beverage Corp. It trades about 0.09 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.01 per unit of risk. If you would invest 364.00 in Rush Street Interactive on August 24, 2024 and sell it today you would earn a total of 984.00 from holding Rush Street Interactive or generate 270.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Rush Street Interactive vs. National Beverage Corp
Performance |
| Timeline |
| Rush Street Interactive |
| National Beverage Corp |
Rush Street and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and National Beverage
The main advantage of trading using opposite Rush Street and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| National Beverage vs. Coca Cola FEMSA SAB | National Beverage vs. COCA A HBC | National Beverage vs. Superior Plus Corp | National Beverage vs. NMI Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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