Correlation Between Rush Street and Poplar Forest
Can any of the company-specific risk be diversified away by investing in both Rush Street and Poplar Forest 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 Poplar Forest 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 Poplar Forest Nerstone, you can compare the effects of market volatilities on Rush Street and Poplar Forest 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 Poplar Forest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Poplar Forest.
Diversification Opportunities for Rush Street and Poplar Forest
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and POPLAR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Poplar Forest Nerstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poplar Forest Nerstone 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 Poplar Forest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poplar Forest Nerstone has no effect on the direction of Rush Street i.e., Rush Street and Poplar Forest go up and down completely randomly.
Pair Corralation between Rush Street and Poplar Forest
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 6.9 times more return on investment than Poplar Forest. However, Rush Street is 6.9 times more volatile than Poplar Forest Nerstone. It trades about 0.35 of its potential returns per unit of risk. Poplar Forest Nerstone is currently generating about 0.37 per unit of risk. If you would invest 1,091 in Rush Street Interactive on September 2, 2024 and sell it today you would earn a total of 351.00 from holding Rush Street Interactive or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Poplar Forest Nerstone
Performance |
| Timeline |
| Rush Street Interactive |
| Poplar Forest Nerstone |
Rush Street and Poplar Forest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Poplar Forest
The main advantage of trading using opposite Rush Street and Poplar Forest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Poplar Forest 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 Poplar Forest will offset losses from the drop in Poplar Forest's long position.The idea behind Rush Street Interactive and Poplar Forest Nerstone pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Poplar Forest vs. Poplar Forest Partners | Poplar Forest vs. Poplar Forest Partners | Poplar Forest vs. Mid Cap 15x Strategy | Poplar Forest vs. Vanguard International Growth |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |