Correlation Between Rush Street and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Rush Street and Park Hotels 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 Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on Rush Street and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Park Hotels.
Diversification Opportunities for Rush Street and Park Hotels
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rush and Park is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Rush Street i.e., Rush Street and Park Hotels go up and down completely randomly.
Pair Corralation between Rush Street and Park Hotels
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.1 times more return on investment than Park Hotels. However, Rush Street is 2.1 times more volatile than Park Hotels Resorts. It trades about 0.33 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.2 per unit of risk. If you would invest 1,040 in Rush Street Interactive on August 27, 2024 and sell it today you would earn a total of 292.00 from holding Rush Street Interactive or generate 28.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Park Hotels Resorts
Performance |
| Timeline |
| Rush Street Interactive |
| Park Hotels Resorts |
Rush Street and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Park Hotels
The main advantage of trading using opposite Rush Street and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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