Correlation Between Gambling and Rush Street

Can any of the company-specific risk be diversified away by investing in both Gambling and Rush Street 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 Gambling and Rush Street into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gambling Group and Rush Street Interactive, you can compare the effects of market volatilities on Gambling and Rush Street 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 Gambling with a short position of Rush Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gambling and Rush Street.

Diversification Opportunities for Gambling and Rush Street

0.76

Correlation Coefficient

Gambling  Rush Street

Poor diversification

The 3 months correlation between Gambling and Rush is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gambling Group and Rush Street Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rush Street Interactive and Gambling 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 Gambling Group are associated (or correlated) with Rush Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rush Street Interactive has no effect on the direction of Gambling i.e., Gambling and Rush Street go up and down completely randomly.

Pair Corralation between Gambling and Rush Street

Given the investment horizon of 90 days Gambling Group is expected to generate 1.18 times more return on investment than Rush Street. However, Gambling is 1.18 times more volatile than Rush Street Interactive. It trades about 0.35 of its potential returns per unit of risk. Rush Street Interactive is currently generating about 0.35 per unit of risk. If you would invest  952.00  in Gambling Group on September 2, 2024 and sell it today you would earn a total of  374.00  from holding Gambling Group or generate 39.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Gambling Group  vs.  Rush Street Interactive

Gambling Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gambling Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, Gambling sustained solid returns over the last few months and may actually be approaching a breakup point.

Rush Street Interactive

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rush Street Interactive are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Rush Street demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gambling and Rush Street

The main advantage of trading using opposite Gambling and Rush Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gambling position performs unexpectedly, Rush Street 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 Rush Street will offset losses from the drop in Rush Street's long position.

The idea behind Gambling Group and Rush Street Interactive pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.