Correlation Between Rush Street and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Rush Street and Equity Growth 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 Equity Growth 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 Equity Growth Strategy, you can compare the effects of market volatilities on Rush Street and Equity Growth 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 Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Equity Growth.
Diversification Opportunities for Rush Street and Equity Growth
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rush and Equity is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Equity Growth Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth Strategy 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 Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth Strategy has no effect on the direction of Rush Street i.e., Rush Street and Equity Growth go up and down completely randomly.
Pair Corralation between Rush Street and Equity Growth
Considering the 90-day investment horizon Rush Street is expected to generate 1.04 times less return on investment than Equity Growth. In addition to that, Rush Street is 5.32 times more volatile than Equity Growth Strategy. It trades about 0.03 of its total potential returns per unit of risk. Equity Growth Strategy is currently generating about 0.16 per unit of volatility. If you would invest 1,348 in Equity Growth Strategy on November 22, 2024 and sell it today you would earn a total of 24.00 from holding Equity Growth Strategy or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Equity Growth Strategy
Performance |
| Timeline |
| Rush Street Interactive |
| Equity Growth Strategy |
Rush Street and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Equity Growth
The main advantage of trading using opposite Rush Street and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth's long position.The idea behind Rush Street Interactive and Equity Growth Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Equity Growth vs. Alpine Ultra Short | Equity Growth vs. Blackrock Global Longshort | Equity Growth vs. Angel Oak Ultrashort | Equity Growth vs. Federated Government Ultrashort |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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