Correlation Between Rush Street and BASF SE
Can any of the company-specific risk be diversified away by investing in both Rush Street and BASF SE 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 BASF SE 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 BASF SE ADR, you can compare the effects of market volatilities on Rush Street and BASF SE 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 BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and BASF SE.
Diversification Opportunities for Rush Street and BASF SE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rush and BASF is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and BASF SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE ADR 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 BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE ADR has no effect on the direction of Rush Street i.e., Rush Street and BASF SE go up and down completely randomly.
Pair Corralation between Rush Street and BASF SE
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.8 times more return on investment than BASF SE. However, Rush Street is 1.8 times more volatile than BASF SE ADR. It trades about 0.37 of its potential returns per unit of risk. BASF SE ADR is currently generating about -0.23 per unit of risk. If you would invest 1,040 in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of 340.00 from holding Rush Street Interactive or generate 32.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. BASF SE ADR
Performance |
| Timeline |
| Rush Street Interactive |
| BASF SE ADR |
Rush Street and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and BASF SE
The main advantage of trading using opposite Rush Street and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. First Graphene | BASF SE vs. Huntsman |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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