Correlation Between Rush Street and Eastern Star
Can any of the company-specific risk be diversified away by investing in both Rush Street and Eastern Star 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 Star 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 Star Real, you can compare the effects of market volatilities on Rush Street and Eastern Star 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 Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Eastern Star.
Diversification Opportunities for Rush Street and Eastern Star
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rush and Eastern is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Eastern Star Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Star Real 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 Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Star Real has no effect on the direction of Rush Street i.e., Rush Street and Eastern Star go up and down completely randomly.
Pair Corralation between Rush Street and Eastern Star
Considering the 90-day investment horizon Rush Street is expected to generate 20.09 times less return on investment than Eastern Star. But when comparing it to its historical volatility, Rush Street Interactive is 44.58 times less risky than Eastern Star. It trades about 0.25 of its potential returns per unit of risk. Eastern Star Real is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Eastern Star Real on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Eastern Star Real or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Rush Street Interactive vs. Eastern Star Real
Performance |
| Timeline |
| Rush Street Interactive |
| Eastern Star Real |
Rush Street and Eastern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Eastern Star
The main advantage of trading using opposite Rush Street and Eastern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Eastern Star 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 Star will offset losses from the drop in Eastern Star's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Eastern Star vs. Bangkok Land Public | Eastern Star vs. Everland Public | Eastern Star vs. Amata Public | Eastern Star vs. Chonburi Concrete Product |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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