Correlation Between Rush Street and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Rush Street and Martin Marietta 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 Martin Marietta 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 Martin Marietta Materials, you can compare the effects of market volatilities on Rush Street and Martin Marietta 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 Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Martin Marietta.
Diversification Opportunities for Rush Street and Martin Marietta
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Martin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials 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 Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of Rush Street i.e., Rush Street and Martin Marietta go up and down completely randomly.
Pair Corralation between Rush Street and Martin Marietta
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.23 times more return on investment than Martin Marietta. However, Rush Street is 2.23 times more volatile than Martin Marietta Materials. It trades about 0.23 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.28 per unit of risk. If you would invest 1,072 in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of 379.00 from holding Rush Street Interactive or generate 35.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Martin Marietta Materials
Performance |
| Timeline |
| Rush Street Interactive |
| Martin Marietta Materials |
Rush Street and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Martin Marietta
The main advantage of trading using opposite Rush Street and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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