Correlation Between Rush Street and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Rush Street and BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants, you can compare the effects of market volatilities on Rush Street and BJs Restaurants 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 BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and BJs Restaurants.
Diversification Opportunities for Rush Street and BJs Restaurants
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and BJs is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Rush Street i.e., Rush Street and BJs Restaurants go up and down completely randomly.
Pair Corralation between Rush Street and BJs Restaurants
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.19 times more return on investment than BJs Restaurants. However, Rush Street is 1.19 times more volatile than BJs Restaurants. It trades about 0.35 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.07 per unit of risk. If you would invest 1,076 in Rush Street Interactive on August 31, 2024 and sell it today you would earn a total of 366.00 from holding Rush Street Interactive or generate 34.01% 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. BJs Restaurants
Performance |
| Timeline |
| Rush Street Interactive |
| BJs Restaurants |
Rush Street and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and BJs Restaurants
The main advantage of trading using opposite Rush Street and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street position performs unexpectedly, BJs Restaurants 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 BJs Restaurants will offset losses from the drop in BJs Restaurants' long position.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| BJs Restaurants vs. Kaiser Aluminum | BJs Restaurants vs. Infrastrutture Wireless Italiane | BJs Restaurants vs. AAC TECHNOLOGHLDGADR | BJs Restaurants vs. SIMS METAL MGT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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