Correlation Between Rush Street and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Rush Street and Fifth Third 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 Fifth Third 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 Fifth Third Bancorp, you can compare the effects of market volatilities on Rush Street and Fifth Third 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 Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Fifth Third.
Diversification Opportunities for Rush Street and Fifth Third
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and Fifth is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third Bancorp 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 Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Rush Street i.e., Rush Street and Fifth Third go up and down completely randomly.
Pair Corralation between Rush Street and Fifth Third
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.86 times more return on investment than Fifth Third. However, Rush Street is 1.86 times more volatile than Fifth Third Bancorp. It trades about 0.41 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.31 per unit of risk. If you would invest 1,040 in Rush Street Interactive on August 29, 2024 and sell it today you would earn a total of 411.00 from holding Rush Street Interactive or generate 39.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Fifth Third Bancorp
Performance |
| Timeline |
| Rush Street Interactive |
| Fifth Third Bancorp |
Rush Street and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Fifth Third
The main advantage of trading using opposite Rush Street and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Fifth Third 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 Fifth Third will offset losses from the drop in Fifth Third's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Fifth Third vs. ATRYS HEALTH SA | Fifth Third vs. Bausch Health Companies | Fifth Third vs. UPDATE SOFTWARE | Fifth Third vs. GUARDANT HEALTH CL |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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