Correlation Between Rush Street and STM Group
Can any of the company-specific risk be diversified away by investing in both Rush Street and STM Group 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 STM Group 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 STM Group Plc, you can compare the effects of market volatilities on Rush Street and STM Group 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 STM Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and STM Group.
Diversification Opportunities for Rush Street and STM Group
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and STM is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and STM Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STM Group Plc 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 STM Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STM Group Plc has no effect on the direction of Rush Street i.e., Rush Street and STM Group go up and down completely randomly.
Pair Corralation between Rush Street and STM Group
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.93 times more return on investment than STM Group. However, Rush Street is 1.93 times more volatile than STM Group Plc. It trades about 0.29 of its potential returns per unit of risk. STM Group Plc is currently generating about 0.13 per unit of risk. If you would invest 1,058 in Rush Street Interactive on August 25, 2024 and sell it today you would earn a total of 274.00 from holding Rush Street Interactive or generate 25.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.82% |
| Values | Daily Returns |
Rush Street Interactive vs. STM Group Plc
Performance |
| Timeline |
| Rush Street Interactive |
| STM Group Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rush Street and STM Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and STM Group
The main advantage of trading using opposite Rush Street and STM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, STM Group 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 STM Group will offset losses from the drop in STM Group's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| STM Group vs. Wheaton Precious Metals | STM Group vs. Greenroc Mining PLC | STM Group vs. Cornish Metals | STM Group vs. Extra Space Storage |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |