Correlation Between Rush Street and Northfield Bancorp
Can any of the company-specific risk be diversified away by investing in both Rush Street and Northfield Bancorp 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 Northfield Bancorp 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 Northfield Bancorp, you can compare the effects of market volatilities on Rush Street and Northfield Bancorp 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 Northfield Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Northfield Bancorp.
Diversification Opportunities for Rush Street and Northfield Bancorp
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Northfield is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Northfield Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northfield Bancorp 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 Northfield Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northfield Bancorp has no effect on the direction of Rush Street i.e., Rush Street and Northfield Bancorp go up and down completely randomly.
Pair Corralation between Rush Street and Northfield Bancorp
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.59 times more return on investment than Northfield Bancorp. However, Rush Street is 1.59 times more volatile than Northfield Bancorp. It trades about 0.09 of its potential returns per unit of risk. Northfield Bancorp is currently generating about 0.01 per unit of risk. If you would invest 353.00 in Rush Street Interactive on August 30, 2024 and sell it today you would earn a total of 1,068 from holding Rush Street Interactive or generate 302.55% 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. Northfield Bancorp
Performance |
| Timeline |
| Rush Street Interactive |
| Northfield Bancorp |
Rush Street and Northfield Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Northfield Bancorp
The main advantage of trading using opposite Rush Street and Northfield Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Northfield Bancorp 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 Northfield Bancorp will offset losses from the drop in Northfield Bancorp's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Northfield Bancorp vs. Finward Bancorp | Northfield Bancorp vs. Community West Bancshares | Northfield Bancorp vs. First Financial Northwest | Northfield Bancorp vs. Home Bancorp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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