Correlation Between Rush Street and Weg ADM

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Can any of the company-specific risk be diversified away by investing in both Rush Street and Weg ADM 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 Weg ADM 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 Weg ADM General, you can compare the effects of market volatilities on Rush Street and Weg ADM 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 Weg ADM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Weg ADM.

Diversification Opportunities for Rush Street and Weg ADM

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Rush and Weg is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Weg ADM General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weg ADM General 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 Weg ADM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weg ADM General has no effect on the direction of Rush Street i.e., Rush Street and Weg ADM go up and down completely randomly.

Pair Corralation between Rush Street and Weg ADM

Considering the 90-day investment horizon Rush Street Interactive is expected to generate 5.69 times more return on investment than Weg ADM. However, Rush Street is 5.69 times more volatile than Weg ADM General. It trades about 0.23 of its potential returns per unit of risk. Weg ADM General is currently generating about -0.08 per unit of risk. If you would invest  1,072  in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of  379.00  from holding Rush Street Interactive or generate 35.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy93.02%
ValuesDaily Returns

Rush Street Interactive  vs.  Weg ADM General

 Performance 
       Timeline  
Rush Street Interactive 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Rush Street Interactive are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Rush Street demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Weg ADM General 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Weg ADM General has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Weg ADM is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Rush Street and Weg ADM Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rush Street and Weg ADM

The main advantage of trading using opposite Rush Street and Weg ADM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Weg ADM 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 Weg ADM will offset losses from the drop in Weg ADM's long position.
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The idea behind Rush Street Interactive and Weg ADM General 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.
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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