Correlation Between Rush Street and Invesco QQQ
Can any of the company-specific risk be diversified away by investing in both Rush Street and Invesco QQQ 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 Invesco QQQ 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 Invesco QQQ Trust, you can compare the effects of market volatilities on Rush Street and Invesco QQQ 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 Invesco QQQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Invesco QQQ.
Diversification Opportunities for Rush Street and Invesco QQQ
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Invesco is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Invesco QQQ Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco QQQ Trust 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 Invesco QQQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco QQQ Trust has no effect on the direction of Rush Street i.e., Rush Street and Invesco QQQ go up and down completely randomly.
Pair Corralation between Rush Street and Invesco QQQ
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.67 times more return on investment than Invesco QQQ. However, Rush Street is 2.67 times more volatile than Invesco QQQ Trust. It trades about 0.33 of its potential returns per unit of risk. Invesco QQQ Trust is currently generating about 0.16 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 | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Rush Street Interactive vs. Invesco QQQ Trust
Performance |
| Timeline |
| Rush Street Interactive |
| Invesco QQQ Trust |
Rush Street and Invesco QQQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Invesco QQQ
The main advantage of trading using opposite Rush Street and Invesco QQQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Invesco QQQ 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 Invesco QQQ will offset losses from the drop in Invesco QQQ'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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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