Correlation Between Rush Street and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Rush Street and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Rush Street and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Emerging Markets.
Diversification Opportunities for Rush Street and Emerging Markets
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rush and Emerging is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Rush Street i.e., Rush Street and Emerging Markets go up and down completely randomly.
Pair Corralation between Rush Street and Emerging Markets
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 3.41 times more return on investment than Emerging Markets. However, Rush Street is 3.41 times more volatile than Emerging Markets Fund. It trades about 0.18 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about -0.13 per unit of risk. If you would invest 1,060 in Rush Street Interactive on August 25, 2024 and sell it today you would earn a total of 272.00 from holding Rush Street Interactive or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Emerging Markets Fund
Performance |
| Timeline |
| Rush Street Interactive |
| Emerging Markets |
Rush Street and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Emerging Markets
The main advantage of trading using opposite Rush Street and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Emerging Markets vs. Capital Growth Fund | Emerging Markets vs. High Income Fund | Emerging Markets vs. International Fund International | Emerging Markets vs. Growth Income Fund |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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