Correlation Between Rush Street and Nine Dragons
Can any of the company-specific risk be diversified away by investing in both Rush Street and Nine Dragons 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 Nine Dragons 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 Nine Dragons Paper, you can compare the effects of market volatilities on Rush Street and Nine Dragons 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 Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Nine Dragons.
Diversification Opportunities for Rush Street and Nine Dragons
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Nine is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Nine Dragons Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Dragons Paper 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 Nine Dragons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Dragons Paper has no effect on the direction of Rush Street i.e., Rush Street and Nine Dragons go up and down completely randomly.
Pair Corralation between Rush Street and Nine Dragons
If you would invest 1,040 in Rush Street Interactive on August 29, 2024 and sell it today you would earn a total of 411.00 from holding Rush Street Interactive or generate 39.52% 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. Nine Dragons Paper
Performance |
| Timeline |
| Rush Street Interactive |
| Nine Dragons Paper |
Rush Street and Nine Dragons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Nine Dragons
The main advantage of trading using opposite Rush Street and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Nine Dragons 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 Nine Dragons will offset losses from the drop in Nine Dragons' long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Nine Dragons vs. Canfor Pulp Products | Nine Dragons vs. Mondi PLC ADR | Nine Dragons vs. Klabin Sa A | Nine Dragons vs. Nine Dragons Paper |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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