Correlation Between Rush Street and Kimberly Clark

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

Diversification Opportunities for Rush Street and Kimberly Clark

-0.48

Correlation Coefficient

Rush Street  Kimberly Clark

Very good diversification

The 3 months correlation between Rush and Kimberly is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Kimberly Clark de Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark de 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 Kimberly Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimberly Clark de has no effect on the direction of Rush Street i.e., Rush Street and Kimberly Clark go up and down completely randomly.

Pair Corralation between Rush Street and Kimberly Clark

Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.52 times more return on investment than Kimberly Clark. However, Rush Street is 1.52 times more volatile than Kimberly Clark de Mexico. It trades about 0.16 of its potential returns per unit of risk. Kimberly Clark de Mexico is currently generating about -0.09 per unit of risk. If you would invest  521.00  in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of  859.00  from holding Rush Street Interactive or generate 164.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.52%
Values	Daily Returns

Rush Street Interactive  vs.  Kimberly Clark de Mexico

Rush Street Interactive

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rush Street Interactive are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Rush Street demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Kimberly Clark de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kimberly Clark de Mexico has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Rush Street and Kimberly Clark

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

The idea behind Rush Street Interactive and Kimberly Clark de Mexico 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.