Correlation Between Rush Street and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Rush Street and JetBlue Airways 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 JetBlue Airways 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 JetBlue Airways, you can compare the effects of market volatilities on Rush Street and JetBlue Airways 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 JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and JetBlue Airways.
Diversification Opportunities for Rush Street and JetBlue Airways
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and JetBlue is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and JetBlue Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways 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 JetBlue Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JetBlue Airways has no effect on the direction of Rush Street i.e., Rush Street and JetBlue Airways go up and down completely randomly.
Pair Corralation between Rush Street and JetBlue Airways
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 0.97 times more return on investment than JetBlue Airways. However, Rush Street Interactive is 1.03 times less risky than JetBlue Airways. It trades about 0.09 of its potential returns per unit of risk. JetBlue Airways is currently generating about 0.01 per unit of risk. If you would invest 353.00 in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of 1,027 from holding Rush Street Interactive or generate 290.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. JetBlue Airways
Performance |
| Timeline |
| Rush Street Interactive |
| JetBlue Airways |
Rush Street and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and JetBlue Airways
The main advantage of trading using opposite Rush Street and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, JetBlue Airways 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 JetBlue Airways will offset losses from the drop in JetBlue Airways' long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| JetBlue Airways vs. Capital One Financial | JetBlue Airways vs. CVS Health | JetBlue Airways vs. Ameriprise Financial | JetBlue Airways vs. Grupo Carso SAB |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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