Correlation Between Rush Street and Granite Construction
Can any of the company-specific risk be diversified away by investing in both Rush Street and Granite Construction 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 Granite Construction 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 Granite Construction, you can compare the effects of market volatilities on Rush Street and Granite Construction 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 Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Granite Construction.
Diversification Opportunities for Rush Street and Granite Construction
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and Granite is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction 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 Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of Rush Street i.e., Rush Street and Granite Construction go up and down completely randomly.
Pair Corralation between Rush Street and Granite Construction
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.34 times more return on investment than Granite Construction. However, Rush Street is 1.34 times more volatile than Granite Construction. It trades about 0.36 of its potential returns per unit of risk. Granite Construction is currently generating about 0.38 per unit of risk. If you would invest 1,040 in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of 340.00 from holding Rush Street Interactive or generate 32.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rush Street Interactive vs. Granite Construction
Performance |
| Timeline |
| Rush Street Interactive |
| Granite Construction |
Rush Street and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Granite Construction
The main advantage of trading using opposite Rush Street and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Granite Construction vs. Flutter Entertainment PLC | Granite Construction vs. Townsquare Media | Granite Construction vs. Hollywood Bowl Group | Granite Construction vs. Caseys General Stores |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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