Correlation Between Rush Street and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Rush Street and Aqr Large 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 Aqr Large 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 Aqr Large Cap, you can compare the effects of market volatilities on Rush Street and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Aqr Large.
Diversification Opportunities for Rush Street and Aqr Large
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and Aqr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Rush Street i.e., Rush Street and Aqr Large go up and down completely randomly.
Pair Corralation between Rush Street and Aqr Large
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 3.91 times more return on investment than Aqr Large. However, Rush Street is 3.91 times more volatile than Aqr Large Cap. It trades about 0.33 of its potential returns per unit of risk. Aqr Large Cap 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Aqr Large Cap
Performance |
| Timeline |
| Rush Street Interactive |
| Aqr Large Cap |
Rush Street and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Aqr Large
The main advantage of trading using opposite Rush Street and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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