Correlation Between Rush Street and Evolution Gaming

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

Diversification Opportunities for Rush Street and Evolution Gaming

-0.75

Correlation Coefficient

Rush Street  Evolution Gaming

Pay attention - limited upside

The 3 months correlation between Rush and Evolution is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Rush Street i.e., Rush Street and Evolution Gaming go up and down completely randomly.

Pair Corralation between Rush Street and Evolution Gaming

Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.09 times more return on investment than Evolution Gaming. However, Rush Street is 1.09 times more volatile than Evolution Gaming Group. It trades about 0.14 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.06 per unit of risk. If you would invest  935.00  in Rush Street Interactive on August 16, 2024 and sell it today you would earn a total of  214.00  from holding Rush Street Interactive or generate 22.89% return on investment over 90 days.

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

Rush Street Interactive  vs.  Evolution Gaming Group

Rush Street Interactive

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rush Street Interactive are ranked lower than 10 (%) 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.

Evolution Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Rush Street and Evolution Gaming

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

The idea behind Rush Street Interactive and Evolution Gaming 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.