Correlation Between Rush Street and Hennessy Stance
Can any of the company-specific risk be diversified away by investing in both Rush Street and Hennessy Stance 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 Hennessy Stance 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 Hennessy Stance ESG, you can compare the effects of market volatilities on Rush Street and Hennessy Stance 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 Hennessy Stance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Hennessy Stance.
Diversification Opportunities for Rush Street and Hennessy Stance
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Hennessy is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Hennessy Stance ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Stance ESG 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 Hennessy Stance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Stance ESG has no effect on the direction of Rush Street i.e., Rush Street and Hennessy Stance go up and down completely randomly.
Pair Corralation between Rush Street and Hennessy Stance
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.25 times more return on investment than Hennessy Stance. However, Rush Street is 2.25 times more volatile than Hennessy Stance ESG. It trades about 0.08 of its potential returns per unit of risk. Hennessy Stance ESG is currently generating about -0.32 per unit of risk. If you would invest 996.00 in Rush Street Interactive on January 9, 2025 and sell it today you would earn a total of 57.00 from holding Rush Street Interactive or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Hennessy Stance ESG
Performance |
| Timeline |
| Rush Street Interactive |
| Hennessy Stance ESG |
Rush Street and Hennessy Stance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Hennessy Stance
The main advantage of trading using opposite Rush Street and Hennessy Stance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Hennessy Stance 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 Hennessy Stance will offset losses from the drop in Hennessy Stance's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Hennessy Stance vs. Vanguard Total Stock | Hennessy Stance vs. SPDR SP 500 | Hennessy Stance vs. Invesco SP 500 | Hennessy Stance vs. iShares Russell 1000 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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