Correlation Between Rush Street and Jensen Portfolio
Can any of the company-specific risk be diversified away by investing in both Rush Street and Jensen Portfolio 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 Jensen Portfolio 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 The Jensen Portfolio, you can compare the effects of market volatilities on Rush Street and Jensen Portfolio 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 Jensen Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Jensen Portfolio.
Diversification Opportunities for Rush Street and Jensen Portfolio
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rush and Jensen is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio 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 Jensen Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Portfolio has no effect on the direction of Rush Street i.e., Rush Street and Jensen Portfolio go up and down completely randomly.
Pair Corralation between Rush Street and Jensen Portfolio
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.75 times more return on investment than Jensen Portfolio. However, Rush Street is 1.75 times more volatile than The Jensen Portfolio. It trades about 0.36 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about -0.11 per unit of risk. If you would invest 1,082 in Rush Street Interactive on September 1, 2024 and sell it today you would earn a total of 360.00 from holding Rush Street Interactive or generate 33.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rush Street Interactive vs. The Jensen Portfolio
Performance |
| Timeline |
| Rush Street Interactive |
| Jensen Portfolio |
Rush Street and Jensen Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Jensen Portfolio
The main advantage of trading using opposite Rush Street and Jensen Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Jensen Portfolio 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 Jensen Portfolio will offset losses from the drop in Jensen Portfolio's long position.| Rush Street vs. The Wendys Co | Rush Street vs. Shake Shack | Rush Street vs. Papa Johns International | Rush Street vs. Darden Restaurants |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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