Correlation Between Rush Street and ARK Innovation
Can any of the company-specific risk be diversified away by investing in both Rush Street and ARK Innovation 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 ARK Innovation 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 ARK Innovation ETF, you can compare the effects of market volatilities on Rush Street and ARK Innovation 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 ARK Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and ARK Innovation.
Diversification Opportunities for Rush Street and ARK Innovation
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and ARK is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and ARK Innovation ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Innovation ETF 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 ARK Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Innovation ETF has no effect on the direction of Rush Street i.e., Rush Street and ARK Innovation go up and down completely randomly.
Pair Corralation between Rush Street and ARK Innovation
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.3 times more return on investment than ARK Innovation. However, Rush Street is 1.3 times more volatile than ARK Innovation ETF. It trades about 0.35 of its potential returns per unit of risk. ARK Innovation ETF is currently generating about 0.26 per unit of risk. If you would invest 1,061 in Rush Street Interactive on August 30, 2024 and sell it today you would earn a total of 360.00 from holding Rush Street Interactive or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. ARK Innovation ETF
Performance |
| Timeline |
| Rush Street Interactive |
| ARK Innovation ETF |
Rush Street and ARK Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and ARK Innovation
The main advantage of trading using opposite Rush Street and ARK Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, ARK Innovation 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 ARK Innovation will offset losses from the drop in ARK Innovation's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| ARK Innovation vs. Freedom Day Dividend | ARK Innovation vs. Franklin Templeton ETF | ARK Innovation vs. iShares MSCI China | ARK Innovation vs. Tidal Trust II |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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