Correlation Between Rush Street and Frontier Lithium
Can any of the company-specific risk be diversified away by investing in both Rush Street and Frontier Lithium 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 Frontier Lithium 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 Frontier Lithium, you can compare the effects of market volatilities on Rush Street and Frontier Lithium 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 Frontier Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Frontier Lithium.
Diversification Opportunities for Rush Street and Frontier Lithium
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rush and Frontier is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Frontier Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Lithium 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 Frontier Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Lithium has no effect on the direction of Rush Street i.e., Rush Street and Frontier Lithium go up and down completely randomly.
Pair Corralation between Rush Street and Frontier Lithium
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 0.83 times more return on investment than Frontier Lithium. However, Rush Street Interactive is 1.21 times less risky than Frontier Lithium. It trades about 0.09 of its potential returns per unit of risk. Frontier Lithium is currently generating about -0.04 per unit of risk. If you would invest 364.00 in Rush Street Interactive on August 24, 2024 and sell it today you would earn a total of 968.00 from holding Rush Street Interactive or generate 265.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Rush Street Interactive vs. Frontier Lithium
Performance |
| Timeline |
| Rush Street Interactive |
| Frontier Lithium |
Rush Street and Frontier Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Frontier Lithium
The main advantage of trading using opposite Rush Street and Frontier Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Frontier Lithium 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 Frontier Lithium will offset losses from the drop in Frontier Lithium's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Frontier Lithium vs. Critical Elements | Frontier Lithium vs. Rock Tech Lithium | Frontier Lithium vs. American Lithium Corp | Frontier Lithium vs. American Manganese |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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