Correlation Between Rush Street and American Beacon
Can any of the company-specific risk be diversified away by investing in both Rush Street and American Beacon 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 American Beacon 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 American Beacon Select, you can compare the effects of market volatilities on Rush Street and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and American Beacon.
Diversification Opportunities for Rush Street and American Beacon
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and American is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and American Beacon Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Select 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Select has no effect on the direction of Rush Street i.e., Rush Street and American Beacon go up and down completely randomly.
Pair Corralation between Rush Street and American Beacon
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 3.13 times more return on investment than American Beacon. However, Rush Street is 3.13 times more volatile than American Beacon Select. It trades about 0.36 of its potential returns per unit of risk. American Beacon Select is currently generating about 0.28 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. American Beacon Select
Performance |
| Timeline |
| Rush Street Interactive |
| American Beacon Select |
Rush Street and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and American Beacon
The main advantage of trading using opposite Rush Street and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. First Trust Exchange Traded | American Beacon vs. Ultimus Managers Trust | American Beacon vs. Horizon Kinetics Medical | American Beacon vs. Harbor Health Care |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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