Correlation Between Rush Street and Pine Cliff
Can any of the company-specific risk be diversified away by investing in both Rush Street and Pine Cliff 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 Pine Cliff 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 Pine Cliff Energy, you can compare the effects of market volatilities on Rush Street and Pine Cliff 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 Pine Cliff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Pine Cliff.
Diversification Opportunities for Rush Street and Pine Cliff
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rush and Pine is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Pine Cliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pine Cliff Energy 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 Pine Cliff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pine Cliff Energy has no effect on the direction of Rush Street i.e., Rush Street and Pine Cliff go up and down completely randomly.
Pair Corralation between Rush Street and Pine Cliff
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.49 times more return on investment than Pine Cliff. However, Rush Street is 1.49 times more volatile than Pine Cliff Energy. It trades about 0.15 of its potential returns per unit of risk. Pine Cliff Energy is currently generating about -0.06 per unit of risk. If you would invest 421.00 in Rush Street Interactive on August 26, 2024 and sell it today you would earn a total of 911.00 from holding Rush Street Interactive or generate 216.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Rush Street Interactive vs. Pine Cliff Energy
Performance |
| Timeline |
| Rush Street Interactive |
| Pine Cliff Energy |
Rush Street and Pine Cliff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Pine Cliff
The main advantage of trading using opposite Rush Street and Pine Cliff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Pine Cliff 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 Pine Cliff will offset losses from the drop in Pine Cliff's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Pine Cliff vs. Gear Energy | Pine Cliff vs. Headwater Exploration | Pine Cliff vs. Cardinal Energy | Pine Cliff vs. Journey Energy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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