Correlation Between Rush Street and Lion Electric
Can any of the company-specific risk be diversified away by investing in both Rush Street and Lion Electric 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 Lion Electric 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 Lion Electric Corp, you can compare the effects of market volatilities on Rush Street and Lion Electric 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 Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Lion Electric.
Diversification Opportunities for Rush Street and Lion Electric
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rush and Lion is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric Corp 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 Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of Rush Street i.e., Rush Street and Lion Electric go up and down completely randomly.
Pair Corralation between Rush Street and Lion Electric
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 0.82 times more return on investment than Lion Electric. However, Rush Street Interactive is 1.21 times less risky than Lion Electric. It trades about 0.12 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.13 per unit of risk. If you would invest 371.00 in Rush Street Interactive on August 26, 2024 and sell it today you would earn a total of 961.00 from holding Rush Street Interactive or generate 259.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Rush Street Interactive vs. Lion Electric Corp
Performance |
| Timeline |
| Rush Street Interactive |
| Lion Electric Corp |
Rush Street and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Lion Electric
The main advantage of trading using opposite Rush Street and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Lion Electric 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 Lion Electric will offset losses from the drop in Lion Electric's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Lion Electric vs. Lion Electric Corp | Lion Electric vs. Alimentation Couchen Tard | Lion Electric vs. BRP Inc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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