Correlation Between Portillos and Rush Street

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

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

Diversification Opportunities for Portillos and Rush Street

0.35

Correlation Coefficient

Portillos  Rush Street

Weak diversification

The 3 months correlation between Portillos and Rush is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Portillos 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 Portillos 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 Portillos 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 Portillos i.e., Portillos and Rush Street go up and down completely randomly.

Pair Corralation between Portillos and Rush Street

Given the investment horizon of 90 days Portillos is expected to generate 1.08 times more return on investment than Rush Street. However, Portillos is 1.08 times more volatile than Rush Street Interactive. It trades about 0.12 of its potential returns per unit of risk. Rush Street Interactive is currently generating about -0.08 per unit of risk. If you would invest  1,109  in Portillos on December 1, 2024 and sell it today you would earn a total of  288.00  from holding Portillos or generate 25.97% return on investment over 90 days.

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

Portillos  vs.  Rush Street Interactive

Portillos

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Portillos are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Portillos displayed solid returns over the last few months and may actually be approaching a breakup point.

Rush Street Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rush Street Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Portillos and Rush Street

The main advantage of trading using opposite Portillos and Rush Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Portillos 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 Portillos 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.