Correlation Between Rush Street and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Rush Street and Baker Hughes 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 Baker Hughes 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 Baker Hughes Co, you can compare the effects of market volatilities on Rush Street and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Baker Hughes.
Diversification Opportunities for Rush Street and Baker Hughes
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Baker is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Rush Street i.e., Rush Street and Baker Hughes go up and down completely randomly.
Pair Corralation between Rush Street and Baker Hughes
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.56 times more return on investment than Baker Hughes. However, Rush Street is 1.56 times more volatile than Baker Hughes Co. It trades about 0.36 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.31 per unit of risk. If you would invest 1,082 in Rush Street Interactive on September 1, 2024 and sell it today you would earn a total of 360.00 from holding Rush Street Interactive or generate 33.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Rush Street Interactive vs. Baker Hughes Co
Performance |
| Timeline |
| Rush Street Interactive |
| Baker Hughes |
Rush Street and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Baker Hughes
The main advantage of trading using opposite Rush Street and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| Rush Street vs. The Wendys Co | Rush Street vs. Shake Shack | Rush Street vs. Papa Johns International | Rush Street vs. Darden Restaurants |
| Baker Hughes vs. BOSTON BEER A | Baker Hughes vs. THAI BEVERAGE | Baker Hughes vs. Autohome ADR | Baker Hughes vs. MOLSON RS BEVERAGE |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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