Correlation Between Rush Street and First Quantum
Can any of the company-specific risk be diversified away by investing in both Rush Street and First Quantum 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 First Quantum 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 First Quantum Minerals, you can compare the effects of market volatilities on Rush Street and First Quantum 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 First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and First Quantum.
Diversification Opportunities for Rush Street and First Quantum
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and First is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Rush Street i.e., Rush Street and First Quantum go up and down completely randomly.
Pair Corralation between Rush Street and First Quantum
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.31 times more return on investment than First Quantum. However, Rush Street is 1.31 times more volatile than First Quantum Minerals. It trades about 0.36 of its potential returns per unit of risk. First Quantum Minerals is currently generating about 0.11 per unit of risk. If you would invest 1,082 in Rush Street Interactive on September 1, 2024 and sell it today you would earn a total of 360.00 from holding Rush Street Interactive or generate 33.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rush Street Interactive vs. First Quantum Minerals
Performance |
| Timeline |
| Rush Street Interactive |
| First Quantum Minerals |
Rush Street and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and First Quantum
The main advantage of trading using opposite Rush Street and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.| Rush Street vs. The Wendys Co | Rush Street vs. Shake Shack | Rush Street vs. Papa Johns International | Rush Street vs. Darden Restaurants |
| First Quantum vs. Lundin Mining | First Quantum vs. HudBay Minerals | First Quantum vs. Teck Resources Limited | First Quantum vs. Ivanhoe Mines |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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