Correlation Between Rush Street and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Rush Street and Legg Mason 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 Legg Mason 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 Legg Mason Bw, you can compare the effects of market volatilities on Rush Street and Legg Mason 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 Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Legg Mason.
Diversification Opportunities for Rush Street and Legg Mason
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and Legg is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw 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 Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Bw has no effect on the direction of Rush Street i.e., Rush Street and Legg Mason go up and down completely randomly.
Pair Corralation between Rush Street and Legg Mason
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 3.69 times more return on investment than Legg Mason. However, Rush Street is 3.69 times more volatile than Legg Mason Bw. It trades about 0.36 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.22 per unit of risk. If you would invest 1,040 in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of 340.00 from holding Rush Street Interactive or generate 32.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rush Street Interactive vs. Legg Mason Bw
Performance |
| Timeline |
| Rush Street Interactive |
| Legg Mason Bw |
Rush Street and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Legg Mason
The main advantage of trading using opposite Rush Street and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Legg Mason vs. Clearbridge Aggressive Growth | Legg Mason vs. Clearbridge Small Cap | Legg Mason vs. Qs International Equity | Legg Mason vs. Clearbridge Appreciation Fund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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