Correlation Between Rush Street and Esports Entertainment

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

Diversification Opportunities for Rush Street and Esports Entertainment

-0.79

Correlation Coefficient

Rush Street  Esports Entertainment

Pay attention - limited upside

The 3 months correlation between Rush and Esports is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment 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 Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of Rush Street i.e., Rush Street and Esports Entertainment go up and down completely randomly.

Pair Corralation between Rush Street and Esports Entertainment

If you would invest  902.00  in Rush Street Interactive on September 2, 2024 and sell it today you would earn a total of  540.00  from holding Rush Street Interactive or generate 59.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Rush Street Interactive  vs.  Esports Entertainment Group

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.

Esports Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esports Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Esports Entertainment is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Rush Street and Esports Entertainment

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

The idea behind Rush Street Interactive and Esports Entertainment Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.