Correlation Between Rush Street and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Rush Street and Bread Financial 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 Bread Financial 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 Bread Financial Holdings, you can compare the effects of market volatilities on Rush Street and Bread Financial 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 Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Bread Financial.
Diversification Opportunities for Rush Street and Bread Financial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rush and Bread is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings 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 Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Rush Street i.e., Rush Street and Bread Financial go up and down completely randomly.
Pair Corralation between Rush Street and Bread Financial
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 0.8 times more return on investment than Bread Financial. However, Rush Street Interactive is 1.24 times less risky than Bread Financial. It trades about 0.26 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about 0.02 per unit of risk. If you would invest 902.00 in Rush Street Interactive on August 31, 2024 and sell it today you would earn a total of 519.00 from holding Rush Street Interactive or generate 57.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Bread Financial Holdings
Performance |
| Timeline |
| Rush Street Interactive |
| Bread Financial Holdings |
Rush Street and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Bread Financial
The main advantage of trading using opposite Rush Street and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Bread Financial vs. SLM Corp | Bread Financial vs. Orix Corp Ads | Bread Financial vs. FirstCash | Bread Financial vs. Medallion Financial Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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