Correlation Between Rush Street and Innovator
Can any of the company-specific risk be diversified away by investing in both Rush Street and Innovator 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 Innovator 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 Innovator SP 500, you can compare the effects of market volatilities on Rush Street and Innovator 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 Innovator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Innovator.
Diversification Opportunities for Rush Street and Innovator
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and Innovator is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Innovator SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator SP 500 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 Innovator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator SP 500 has no effect on the direction of Rush Street i.e., Rush Street and Innovator go up and down completely randomly.
Pair Corralation between Rush Street and Innovator
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 12.71 times more return on investment than Innovator. However, Rush Street is 12.71 times more volatile than Innovator SP 500. It trades about 0.35 of its potential returns per unit of risk. Innovator SP 500 is currently generating about 0.22 per unit of risk. If you would invest 1,061 in Rush Street Interactive on August 30, 2024 and sell it today you would earn a total of 360.00 from holding Rush Street Interactive or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rush Street Interactive vs. Innovator SP 500
Performance |
| Timeline |
| Rush Street Interactive |
| Innovator SP 500 |
Rush Street and Innovator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Innovator
The main advantage of trading using opposite Rush Street and Innovator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Innovator 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 Innovator will offset losses from the drop in Innovator's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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