Correlation Between Rush Street and AEye
Can any of the company-specific risk be diversified away by investing in both Rush Street and AEye 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 AEye 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 AEye Inc, you can compare the effects of market volatilities on Rush Street and AEye 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 AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and AEye.
Diversification Opportunities for Rush Street and AEye
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rush and AEye is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc 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 AEye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEye Inc has no effect on the direction of Rush Street i.e., Rush Street and AEye go up and down completely randomly.
Pair Corralation between Rush Street and AEye
Considering the 90-day investment horizon Rush Street is expected to generate 2.48 times less return on investment than AEye. But when comparing it to its historical volatility, Rush Street Interactive is 5.67 times less risky than AEye. It trades about 0.36 of its potential returns per unit of risk. AEye Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.90 in AEye Inc on September 1, 2024 and sell it today you would earn a total of 0.30 from holding AEye Inc or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. AEye Inc
Performance |
| Timeline |
| Rush Street Interactive |
| AEye Inc |
Rush Street and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and AEye
The main advantage of trading using opposite Rush Street and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, AEye 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 AEye will offset losses from the drop in AEye'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 |
| AEye vs. Faraday Future Intelligent | AEye vs. Innoviz Technologies | AEye vs. Aeye Inc | AEye vs. Xos Equity Warrants |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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