Correlation Between Rush Street and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Rush Street and BGF Retail 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 BGF Retail 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 BGF Retail Co, you can compare the effects of market volatilities on Rush Street and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and BGF Retail.
Diversification Opportunities for Rush Street and BGF Retail
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rush and BGF is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Rush Street i.e., Rush Street and BGF Retail go up and down completely randomly.
Pair Corralation between Rush Street and BGF Retail
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.64 times more return on investment than BGF Retail. However, Rush Street is 1.64 times more volatile than BGF Retail Co. It trades about 0.14 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.03 per unit of risk. If you would invest 895.00 in Rush Street Interactive on August 29, 2024 and sell it today you would earn a total of 556.00 from holding Rush Street Interactive or generate 62.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.0% |
| Values | Daily Returns |
Rush Street Interactive vs. BGF Retail Co
Performance |
| Timeline |
| Rush Street Interactive |
| BGF Retail |
Rush Street and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and BGF Retail
The main advantage of trading using opposite Rush Street and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail vs. Microfriend |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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