Correlation Between Rush Street and PHX Energy
Can any of the company-specific risk be diversified away by investing in both Rush Street and PHX 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 PHX 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 PHX Energy Services, you can compare the effects of market volatilities on Rush Street and PHX 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 PHX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and PHX Energy.
Diversification Opportunities for Rush Street and PHX Energy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rush and PHX is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and PHX Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Energy Services 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 PHX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Energy Services has no effect on the direction of Rush Street i.e., Rush Street and PHX Energy go up and down completely randomly.
Pair Corralation between Rush Street and PHX Energy
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 0.65 times more return on investment than PHX Energy. However, Rush Street Interactive is 1.54 times less risky than PHX Energy. It trades about 0.09 of its potential returns per unit of risk. PHX Energy Services is currently generating about 0.04 per unit of risk. If you would invest 364.00 in Rush Street Interactive on August 25, 2024 and sell it today you would earn a total of 968.00 from holding Rush Street Interactive or generate 265.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.54% |
| Values | Daily Returns |
Rush Street Interactive vs. PHX Energy Services
Performance |
| Timeline |
| Rush Street Interactive |
| PHX Energy Services |
Rush Street and PHX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and PHX Energy
The main advantage of trading using opposite Rush Street and PHX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, PHX 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 PHX Energy will offset losses from the drop in PHX Energy's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| PHX Energy vs. Archer Limited | PHX Energy vs. Cathedral Energy Services | PHX Energy vs. Noble plc | PHX Energy vs. Borr Drilling |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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