Correlation Between Rush Street and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Rush Street and Waterstone Financial 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 Waterstone Financial 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 Waterstone Financial, you can compare the effects of market volatilities on Rush Street and Waterstone Financial 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 Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Waterstone Financial.
Diversification Opportunities for Rush Street and Waterstone Financial
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rush and Waterstone is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial 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 Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Rush Street i.e., Rush Street and Waterstone Financial go up and down completely randomly.
Pair Corralation between Rush Street and Waterstone Financial
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.38 times more return on investment than Waterstone Financial. However, Rush Street is 1.38 times more volatile than Waterstone Financial. It trades about 0.24 of its potential returns per unit of risk. Waterstone Financial is currently generating about 0.01 per unit of risk. If you would invest 937.00 in Rush Street Interactive on August 30, 2024 and sell it today you would earn a total of 484.00 from holding Rush Street Interactive or generate 51.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Street Interactive vs. Waterstone Financial
Performance |
| Timeline |
| Rush Street Interactive |
| Waterstone Financial |
Rush Street and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Waterstone Financial
The main advantage of trading using opposite Rush Street and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, Waterstone Financial 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 Waterstone Financial will offset losses from the drop in Waterstone Financial's long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Heritage Financial |
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 Stocks Directory module to find actively traded stocks across global markets.
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