Correlation Between Rush Street and Pact Group
Can any of the company-specific risk be diversified away by investing in both Rush Street and Pact Group 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 Pact Group 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 Pact Group Holdings, you can compare the effects of market volatilities on Rush Street and Pact Group 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 Pact Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Pact Group.
Diversification Opportunities for Rush Street and Pact Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rush and Pact is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Pact Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pact Group Holdings 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 Pact Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pact Group Holdings has no effect on the direction of Rush Street i.e., Rush Street and Pact Group go up and down completely randomly.
Pair Corralation between Rush Street and Pact Group
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.71 times more return on investment than Pact Group. However, Rush Street is 2.71 times more volatile than Pact Group Holdings. It trades about 0.41 of its potential returns per unit of risk. Pact Group Holdings is currently generating about -0.07 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Pact Group Holdings
Performance |
| Timeline |
| Rush Street Interactive |
| Pact Group Holdings |
Rush Street and Pact Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Pact Group
The main advantage of trading using opposite Rush Street and Pact Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Pact Group 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 Pact Group will offset losses from the drop in Pact Group's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Pact Group vs. Mirrabooka Investments | Pact Group vs. Nova Eye Medical | Pact Group vs. MFF Capital Investments | Pact Group vs. Air New Zealand |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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