Correlation Between Rush Street and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Rush Street and Lundin Mining 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 Lundin Mining 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 Lundin Mining, you can compare the effects of market volatilities on Rush Street and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Lundin Mining.
Diversification Opportunities for Rush Street and Lundin Mining
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rush and Lundin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of Rush Street i.e., Rush Street and Lundin Mining go up and down completely randomly.
Pair Corralation between Rush Street and Lundin Mining
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.99 times more return on investment than Lundin Mining. However, Rush Street is 1.99 times more volatile than Lundin Mining. It trades about 0.36 of its potential returns per unit of risk. Lundin Mining is currently generating about 0.07 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 Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rush Street Interactive vs. Lundin Mining
Performance |
| Timeline |
| Rush Street Interactive |
| Lundin Mining |
Rush Street and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Lundin Mining
The main advantage of trading using opposite Rush Street and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining'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 |
| Lundin Mining vs. Boliden AB | Lundin Mining vs. Lundin Gold | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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