Correlation Between Rush Street and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Rush Street and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison Global, you can compare the effects of market volatilities on Rush Street and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Prudential Jennison.
Diversification Opportunities for Rush Street and Prudential Jennison
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Prudential is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Prudential Jennison Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Rush Street i.e., Rush Street and Prudential Jennison go up and down completely randomly.
Pair Corralation between Rush Street and Prudential Jennison
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 3.19 times more return on investment than Prudential Jennison. However, Rush Street is 3.19 times more volatile than Prudential Jennison Global. It trades about 0.14 of its potential returns per unit of risk. Prudential Jennison Global is currently generating about 0.11 per unit of risk. If you would invest 410.00 in Rush Street Interactive on August 29, 2024 and sell it today you would earn a total of 1,011 from holding Rush Street Interactive or generate 246.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Prudential Jennison Global
Performance |
| Timeline |
| Rush Street Interactive |
| Prudential Jennison |
Rush Street and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Prudential Jennison
The main advantage of trading using opposite Rush Street and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
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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 Stocks Directory module to find actively traded stocks across global markets.
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