Correlation Between International Game and Rush Street

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

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

Diversification Opportunities for International Game and Rush Street

-0.6

Correlation Coefficient

International Game  Rush Street

Excellent diversification

The 3 months correlation between International and Rush is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology 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 International Game 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 International Game Technology 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 International Game i.e., International Game and Rush Street go up and down completely randomly.

Pair Corralation between International Game and Rush Street

Considering the 90-day investment horizon International Game Technology is expected to under-perform the Rush Street. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 1.88 times less risky than Rush Street. The stock trades about -0.22 of its potential returns per unit of risk. The Rush Street Interactive is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,036  in Rush Street Interactive on September 20, 2024 and sell it today you would earn a total of  277.00  from holding Rush Street Interactive or generate 26.74% return on investment over 90 days.

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

International Game Technology  vs.  Rush Street Interactive

International Game

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with International Game and Rush Street

The main advantage of trading using opposite International Game and Rush Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game 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 International Game Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.