Correlation Between Rush Street and Mainstay
Can any of the company-specific risk be diversified away by investing in both Rush Street and Mainstay 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 Mainstay 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 Mainstay Sp 500, you can compare the effects of market volatilities on Rush Street and Mainstay 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 Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Mainstay.
Diversification Opportunities for Rush Street and Mainstay
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and Mainstay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 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 Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Rush Street i.e., Rush Street and Mainstay go up and down completely randomly.
Pair Corralation between Rush Street and Mainstay
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 5.54 times more return on investment than Mainstay. However, Rush Street is 5.54 times more volatile than Mainstay Sp 500. It trades about 0.36 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.36 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 | 95.45% |
| Values | Daily Returns |
Rush Street Interactive vs. Mainstay Sp 500
Performance |
| Timeline |
| Rush Street Interactive |
| Mainstay Sp 500 |
Rush Street and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Mainstay
The main advantage of trading using opposite Rush Street and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Mainstay 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 Mainstay will offset losses from the drop in Mainstay'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 |
| Mainstay vs. T Rowe Price | Mainstay vs. T Rowe Price | Mainstay vs. Tax Managed Large Cap | Mainstay vs. T Rowe Price |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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