Correlation Between Rush Street and NGL Energy
Can any of the company-specific risk be diversified away by investing in both Rush Street and NGL Energy 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 NGL Energy 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 NGL Energy Partners, you can compare the effects of market volatilities on Rush Street and NGL Energy 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 NGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and NGL Energy.
Diversification Opportunities for Rush Street and NGL Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and NGL is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and NGL Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGL Energy Partners 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 NGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGL Energy Partners has no effect on the direction of Rush Street i.e., Rush Street and NGL Energy go up and down completely randomly.
Pair Corralation between Rush Street and NGL Energy
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.39 times more return on investment than NGL Energy. However, Rush Street is 1.39 times more volatile than NGL Energy Partners. It trades about 0.08 of its potential returns per unit of risk. NGL Energy Partners is currently generating about 0.02 per unit of risk. If you would invest 327.00 in Rush Street Interactive on January 8, 2025 and sell it today you would earn a total of 726.00 from holding Rush Street Interactive or generate 222.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Rush Street Interactive vs. NGL Energy Partners
Performance |
| Timeline |
| Rush Street Interactive |
| NGL Energy Partners |
Rush Street and NGL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and NGL Energy
The main advantage of trading using opposite Rush Street and NGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, NGL Energy 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 NGL Energy will offset losses from the drop in NGL Energy's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| NGL Energy vs. NGL Energy Partners | NGL Energy vs. Dynagas LNG Partners | NGL Energy vs. Martin Midstream Partners | NGL Energy vs. Kinetik Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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