Correlation Between Rush Street and Hilltop Holdings
Can any of the company-specific risk be diversified away by investing in both Rush Street and Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings, you can compare the effects of market volatilities on Rush Street and Hilltop Holdings 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 Hilltop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Hilltop Holdings.
Diversification Opportunities for Rush Street and Hilltop Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rush and Hilltop is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Hilltop Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilltop Holdings 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 Hilltop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilltop Holdings has no effect on the direction of Rush Street i.e., Rush Street and Hilltop Holdings go up and down completely randomly.
Pair Corralation between Rush Street and Hilltop Holdings
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.44 times more return on investment than Hilltop Holdings. However, Rush Street is 1.44 times more volatile than Hilltop Holdings. It trades about 0.35 of its potential returns per unit of risk. Hilltop Holdings is currently generating about 0.06 per unit of risk. If you would invest 1,061 in Rush Street Interactive on August 30, 2024 and sell it today you would earn a total of 360.00 from holding Rush Street Interactive or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Hilltop Holdings
Performance |
| Timeline |
| Rush Street Interactive |
| Hilltop Holdings |
Rush Street and Hilltop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Hilltop Holdings
The main advantage of trading using opposite Rush Street and Hilltop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Hilltop Holdings 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 Hilltop Holdings will offset losses from the drop in Hilltop Holdings' long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Hilltop Holdings vs. SVB T Corp | Hilltop Holdings vs. First Capital | Hilltop Holdings vs. Pioneer Bankcorp | Hilltop Holdings vs. Liberty Northwest Bancorp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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