Correlation Between Rush Street and Aena SME
Can any of the company-specific risk be diversified away by investing in both Rush Street and Aena SME 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 Aena SME 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 Aena SME SA, you can compare the effects of market volatilities on Rush Street and Aena SME 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 Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Aena SME.
Diversification Opportunities for Rush Street and Aena SME
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Aena is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of Rush Street i.e., Rush Street and Aena SME go up and down completely randomly.
Pair Corralation between Rush Street and Aena SME
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 3.4 times more return on investment than Aena SME. However, Rush Street is 3.4 times more volatile than Aena SME SA. It trades about 0.13 of its potential returns per unit of risk. Aena SME SA is currently generating about 0.1 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 | 98.42% |
| Values | Daily Returns |
Rush Street Interactive vs. Aena SME SA
Performance |
| Timeline |
| Rush Street Interactive |
| Aena SME SA |
Rush Street and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Aena SME
The main advantage of trading using opposite Rush Street and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Aena SME 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 Aena SME will offset losses from the drop in Aena SME's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Aena SME vs. AENA SME UNSPADR110 | Aena SME vs. Superior Plus Corp | Aena SME vs. NMI Holdings | Aena SME vs. Origin Agritech |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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