Correlation Between American Funds and American Rebel
Can any of the company-specific risk be diversified away by investing in both American Funds and American Rebel 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 American Funds and American Rebel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and American Rebel Holdings, you can compare the effects of market volatilities on American Funds and American Rebel 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 American Funds with a short position of American Rebel. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and American Rebel.
Diversification Opportunities for American Funds and American Rebel
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and American is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and American Rebel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Rebel Holdings and American Funds 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 American Funds Fundamental are associated (or correlated) with American Rebel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Rebel Holdings has no effect on the direction of American Funds i.e., American Funds and American Rebel go up and down completely randomly.
Pair Corralation between American Funds and American Rebel
Assuming the 90 days horizon American Funds is expected to generate 106.19 times less return on investment than American Rebel. But when comparing it to its historical volatility, American Funds Fundamental is 64.73 times less risky than American Rebel. It trades about 0.12 of its potential returns per unit of risk. American Rebel Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1.05 in American Rebel Holdings on October 23, 2024 and sell it today you would earn a total of 0.65 from holding American Rebel Holdings or generate 61.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. American Rebel Holdings
Performance |
| Timeline |
| American Funds Funda |
| American Rebel Holdings |
American Funds and American Rebel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and American Rebel
The main advantage of trading using opposite American Funds and American Rebel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, American Rebel 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 American Rebel will offset losses from the drop in American Rebel's long position.| American Funds vs. Small Pany Growth | American Funds vs. Needham Small Cap | American Funds vs. Praxis Small Cap | American Funds vs. Franklin Small Cap |
| American Rebel vs. Boston Beer | American Rebel vs. SNDL Inc | American Rebel vs. Diageo PLC ADR | American Rebel vs. Constellation Brands Class |
Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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