Correlation Between Rush Street and Nextmart
Can any of the company-specific risk be diversified away by investing in both Rush Street and Nextmart 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 Nextmart 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 Nextmart, you can compare the effects of market volatilities on Rush Street and Nextmart 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 Nextmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Nextmart.
Diversification Opportunities for Rush Street and Nextmart
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rush and Nextmart is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Nextmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextmart 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 Nextmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextmart has no effect on the direction of Rush Street i.e., Rush Street and Nextmart go up and down completely randomly.
Pair Corralation between Rush Street and Nextmart
Considering the 90-day investment horizon Rush Street is expected to generate 9.56 times less return on investment than Nextmart. But when comparing it to its historical volatility, Rush Street Interactive is 10.64 times less risky than Nextmart. It trades about 0.09 of its potential returns per unit of risk. Nextmart is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.55 in Nextmart on January 14, 2025 and sell it today you would lose (0.54) from holding Nextmart or give up 98.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Rush Street Interactive vs. Nextmart
Performance |
| Timeline |
| Rush Street Interactive |
| Nextmart |
Rush Street and Nextmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Nextmart
The main advantage of trading using opposite Rush Street and Nextmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Nextmart 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 Nextmart will offset losses from the drop in Nextmart's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Nextmart vs. Genesis Electronics Group | Nextmart vs. Industrial Nanotech | Nextmart vs. Intl Star | Nextmart vs. HeadsUp Entertainment International |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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