Correlation Between Rush Street and Red Rock
Can any of the company-specific risk be diversified away by investing in both Rush Street and Red Rock 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 Red Rock 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 Red Rock Resorts, you can compare the effects of market volatilities on Rush Street and Red Rock 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 Red Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Red Rock.
Diversification Opportunities for Rush Street and Red Rock
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rush and Red is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Red Rock Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Rock Resorts 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 Red Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Rock Resorts has no effect on the direction of Rush Street i.e., Rush Street and Red Rock go up and down completely randomly.
Pair Corralation between Rush Street and Red Rock
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.6 times more return on investment than Red Rock. However, Rush Street is 1.6 times more volatile than Red Rock Resorts. It trades about 0.34 of its potential returns per unit of risk. Red Rock Resorts is currently generating about -0.1 per unit of risk. If you would invest 1,076 in Rush Street Interactive on August 31, 2024 and sell it today you would earn a total of 345.00 from holding Rush Street Interactive or generate 32.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Red Rock Resorts
Performance |
| Timeline |
| Rush Street Interactive |
| Red Rock Resorts |
Rush Street and Red Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Red Rock
The main advantage of trading using opposite Rush Street and Red Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Red Rock 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 Red Rock will offset losses from the drop in Red Rock's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Red Rock vs. Golden Entertainment | Red Rock vs. Century Casinos | Red Rock vs. Studio City International | Red Rock vs. Ballys Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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