Correlation Between Rush Street and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both Rush Street and Connecticut Light 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 Connecticut Light 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 The Connecticut Light, you can compare the effects of market volatilities on Rush Street and Connecticut Light 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 Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Connecticut Light.
Diversification Opportunities for Rush Street and Connecticut Light
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rush and Connecticut is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light 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 Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of Rush Street i.e., Rush Street and Connecticut Light go up and down completely randomly.
Pair Corralation between Rush Street and Connecticut Light
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.97 times more return on investment than Connecticut Light. However, Rush Street is 1.97 times more volatile than The Connecticut Light. It trades about 0.14 of its potential returns per unit of risk. The Connecticut Light is currently generating about 0.04 per unit of risk. If you would invest 895.00 in Rush Street Interactive on August 29, 2024 and sell it today you would earn a total of 526.00 from holding Rush Street Interactive or generate 58.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Rush Street Interactive vs. The Connecticut Light
Performance |
| Timeline |
| Rush Street Interactive |
| Connecticut Light |
Rush Street and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Connecticut Light
The main advantage of trading using opposite Rush Street and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Connecticut Light vs. Treasury Wine Estates | Connecticut Light vs. China Tontine Wines | Connecticut Light vs. Insteel Industries | Connecticut Light vs. Century Aluminum |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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