Correlation Between Esports Entertainment and Rush Street

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

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

Diversification Opportunities for Esports Entertainment and Rush Street

-0.4

Correlation Coefficient

Esports Entertainment  Rush Street

Very good diversification

The 24 months correlation between Esports and Rush is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Esports Entertainment 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 Esports Entertainment 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 Esports Entertainment 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 Esports Entertainment i.e., Esports Entertainment and Rush Street go up and down completely randomly.

Pair Corralation between Esports Entertainment and Rush Street

If you would invest  611.00  in Rush Street Interactive on February 22, 2024 and sell it today you would earn a total of  257.00  from holding Rush Street Interactive or generate 42.06% return on investment over 90 days.

Time Period	24 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Esports Entertainment Group  vs.  Rush Street Interactive

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. Even with relatively invariable essential indicators, Esports Entertainment is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Rush Street Interactive

Risk-Adjusted Performance

3 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rush Street Interactive are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Rush Street may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Esports Entertainment and Rush Street

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

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.