Correlation Between Rush Street and Spark Power
Can any of the company-specific risk be diversified away by investing in both Rush Street and Spark Power 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 Spark Power 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 Spark Power Group, you can compare the effects of market volatilities on Rush Street and Spark Power 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 Spark Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Spark Power.
Diversification Opportunities for Rush Street and Spark Power
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rush and Spark is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Spark Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Power Group 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 Spark Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spark Power Group has no effect on the direction of Rush Street i.e., Rush Street and Spark Power go up and down completely randomly.
Pair Corralation between Rush Street and Spark Power
Considering the 90-day investment horizon Rush Street is expected to generate 23.55 times less return on investment than Spark Power. But when comparing it to its historical volatility, Rush Street Interactive is 24.21 times less risky than Spark Power. It trades about 0.09 of its potential returns per unit of risk. Spark Power Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Spark Power Group on August 31, 2024 and sell it today you would lose (9.00) from holding Spark Power Group or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.3% |
| Values | Daily Returns |
Rush Street Interactive vs. Spark Power Group
Performance |
| Timeline |
| Rush Street Interactive |
| Spark Power Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rush Street and Spark Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Spark Power
The main advantage of trading using opposite Rush Street and Spark Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Spark Power 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 Spark Power will offset losses from the drop in Spark Power's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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