Correlation Between Rush Street and Bloomin Brands
Can any of the company-specific risk be diversified away by investing in both Rush Street and Bloomin Brands 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 Bloomin Brands 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 Bloomin Brands, you can compare the effects of market volatilities on Rush Street and Bloomin Brands 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 Bloomin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Bloomin Brands.
Diversification Opportunities for Rush Street and Bloomin Brands
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rush and Bloomin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Bloomin Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomin Brands 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 Bloomin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomin Brands has no effect on the direction of Rush Street i.e., Rush Street and Bloomin Brands go up and down completely randomly.
Pair Corralation between Rush Street and Bloomin Brands
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.3 times more return on investment than Bloomin Brands. However, Rush Street is 1.3 times more volatile than Bloomin Brands. It trades about 0.17 of its potential returns per unit of risk. Bloomin Brands is currently generating about -0.07 per unit of risk. If you would invest 386.00 in Rush Street Interactive on September 2, 2024 and sell it today you would earn a total of 1,056 from holding Rush Street Interactive or generate 273.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Bloomin Brands
Performance |
| Timeline |
| Rush Street Interactive |
| Bloomin Brands |
Rush Street and Bloomin Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Bloomin Brands
The main advantage of trading using opposite Rush Street and Bloomin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Bloomin Brands 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 Bloomin Brands will offset losses from the drop in Bloomin Brands' long position.The idea behind Rush Street Interactive and Bloomin Brands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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