Correlation Between Rush Street and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Rush Street and Host Hotels 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 Host Hotels 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 Host Hotels Resorts, you can compare the effects of market volatilities on Rush Street and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Host Hotels.
Diversification Opportunities for Rush Street and Host Hotels
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Host is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Rush Street i.e., Rush Street and Host Hotels go up and down completely randomly.
Pair Corralation between Rush Street and Host Hotels
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.61 times more return on investment than Host Hotels. However, Rush Street is 1.61 times more volatile than Host Hotels Resorts. It trades about 0.12 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.01 per unit of risk. If you would invest 880.00 in Rush Street Interactive on August 25, 2024 and sell it today you would earn a total of 452.00 from holding Rush Street Interactive or generate 51.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.92% |
| Values | Daily Returns |
Rush Street Interactive vs. Host Hotels Resorts
Performance |
| Timeline |
| Rush Street Interactive |
| Host Hotels Resorts |
Rush Street and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Host Hotels
The main advantage of trading using opposite Rush Street and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Host Hotels vs. DELTA AIR LINES | Host Hotels vs. Tower One Wireless | Host Hotels vs. Altair Engineering | Host Hotels vs. 24SEVENOFFICE GROUP AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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