Correlation Between Rush Street and PlayAGS

Can any of the company-specific risk be diversified away by investing in both Rush Street and PlayAGS 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 PlayAGS 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 PlayAGS, you can compare the effects of market volatilities on Rush Street and PlayAGS 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 PlayAGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and PlayAGS.

Diversification Opportunities for Rush Street and PlayAGS

0.51

Correlation Coefficient

Rush Street  PlayAGS

Very weak diversification

The 3 months correlation between Rush and PlayAGS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and PlayAGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayAGS 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 PlayAGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayAGS has no effect on the direction of Rush Street i.e., Rush Street and PlayAGS go up and down completely randomly.

Pair Corralation between Rush Street and PlayAGS

Considering the 90-day investment horizon Rush Street Interactive is expected to under-perform the PlayAGS. In addition to that, Rush Street is 8.27 times more volatile than PlayAGS. It trades about -0.05 of its total potential returns per unit of risk. PlayAGS is currently generating about 0.19 per unit of volatility. If you would invest  1,162  in PlayAGS on November 28, 2024 and sell it today you would earn a total of  47.00  from holding PlayAGS or generate 4.04% return on investment over 90 days.

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

Rush Street Interactive  vs.  PlayAGS

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 latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

PlayAGS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PlayAGS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rush Street and PlayAGS

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

The idea behind Rush Street Interactive and PlayAGS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.