Correlation Between Rush Street and Eastern
Can any of the company-specific risk be diversified away by investing in both Rush Street and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Rush Street and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Eastern.
Diversification Opportunities for Rush Street and Eastern
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rush and Eastern is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Rush Street i.e., Rush Street and Eastern go up and down completely randomly.
Pair Corralation between Rush Street and Eastern
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.02 times more return on investment than Eastern. However, Rush Street is 1.02 times more volatile than Eastern Co. It trades about 0.15 of its potential returns per unit of risk. Eastern Co is currently generating about 0.07 per unit of risk. If you would invest 441.00 in Rush Street Interactive on August 27, 2024 and sell it today you would earn a total of 891.00 from holding Rush Street Interactive or generate 202.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Eastern Co
Performance |
| Timeline |
| Rush Street Interactive |
| Eastern |
Rush Street and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Eastern
The main advantage of trading using opposite Rush Street and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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