Correlation Between Rush Street and Fangdd Network
Can any of the company-specific risk be diversified away by investing in both Rush Street and Fangdd Network 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 Fangdd Network 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 Fangdd Network Group, you can compare the effects of market volatilities on Rush Street and Fangdd Network 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 Fangdd Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Fangdd Network.
Diversification Opportunities for Rush Street and Fangdd Network
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rush and Fangdd is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Fangdd Network Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangdd Network Group 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 Fangdd Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangdd Network Group has no effect on the direction of Rush Street i.e., Rush Street and Fangdd Network go up and down completely randomly.
Pair Corralation between Rush Street and Fangdd Network
Considering the 90-day investment horizon Rush Street is expected to generate 6.39 times less return on investment than Fangdd Network. But when comparing it to its historical volatility, Rush Street Interactive is 10.24 times less risky than Fangdd Network. It trades about 0.19 of its potential returns per unit of risk. Fangdd Network Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Fangdd Network Group on August 24, 2024 and sell it today you would earn a total of 9.20 from holding Fangdd Network Group or generate 21.4% 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. Fangdd Network Group
Performance |
| Timeline |
| Rush Street Interactive |
| Fangdd Network Group |
Rush Street and Fangdd Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Fangdd Network
The main advantage of trading using opposite Rush Street and Fangdd Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Fangdd Network 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 Fangdd Network will offset losses from the drop in Fangdd Network's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Fangdd Network vs. MDJM | Fangdd Network vs. Southcorp Capital | Fangdd Network vs. Frp Holdings Ord | Fangdd Network vs. Ucommune 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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