Correlation Between Rush Street and Warner Music
Can any of the company-specific risk be diversified away by investing in both Rush Street and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on Rush Street and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Warner Music.
Diversification Opportunities for Rush Street and Warner Music
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Warner is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of Rush Street i.e., Rush Street and Warner Music go up and down completely randomly.
Pair Corralation between Rush Street and Warner Music
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 2.45 times more return on investment than Warner Music. However, Rush Street is 2.45 times more volatile than Warner Music Group. It trades about 0.36 of its potential returns per unit of risk. Warner Music Group is currently generating about 0.07 per unit of risk. If you would invest 1,040 in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of 340.00 from holding Rush Street Interactive or generate 32.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Rush Street Interactive vs. Warner Music Group
Performance |
| Timeline |
| Rush Street Interactive |
| Warner Music Group |
Rush Street and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Warner Music
The main advantage of trading using opposite Rush Street and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Warner Music vs. Fidelity National Information | Warner Music vs. Planet Fitness | Warner Music vs. Verizon Communications | Warner Music vs. Zoom Video Communications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |