Correlation Between Rush Street and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Rush Street and Maple Leaf 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 Maple Leaf 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 Maple Leaf Green, you can compare the effects of market volatilities on Rush Street and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Maple Leaf.
Diversification Opportunities for Rush Street and Maple Leaf
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rush and Maple is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Maple Leaf Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Green 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Green has no effect on the direction of Rush Street i.e., Rush Street and Maple Leaf go up and down completely randomly.
Pair Corralation between Rush Street and Maple Leaf
Considering the 90-day investment horizon Rush Street is expected to generate 2.64 times less return on investment than Maple Leaf. But when comparing it to its historical volatility, Rush Street Interactive is 5.52 times less risky than Maple Leaf. It trades about 0.36 of its potential returns per unit of risk. Maple Leaf Green is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2.40 in Maple Leaf Green on September 1, 2024 and sell it today you would earn a total of 0.80 from holding Maple Leaf Green or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Maple Leaf Green
Performance |
| Timeline |
| Rush Street Interactive |
| Maple Leaf Green |
Rush Street and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Maple Leaf
The main advantage of trading using opposite Rush Street and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf'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 |
| Maple Leaf vs. Greater Cannabis | Maple Leaf vs. Global Hemp Group | Maple Leaf vs. Cannabis Suisse Corp | Maple Leaf vs. Mc Endvrs |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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