Correlation Between Biglari Holdings and American Rebel
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings 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 Biglari Holdings and American Rebel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and American Rebel Holdings, you can compare the effects of market volatilities on Biglari Holdings 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 Biglari Holdings with a short position of American Rebel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and American Rebel.
Diversification Opportunities for Biglari Holdings and American Rebel
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biglari and American is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings i.e., Biglari Holdings and American Rebel go up and down completely randomly.
Pair Corralation between Biglari Holdings and American Rebel
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 135.39 times less return on investment than American Rebel. But when comparing it to its historical volatility, Biglari Holdings is 50.16 times less risky than American Rebel. It trades about 0.05 of its potential returns per unit of risk. American Rebel Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.50 in American Rebel Holdings on August 28, 2024 and sell it today you would lose (0.68) from holding American Rebel Holdings or give up 45.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.19% |
| Values | Daily Returns |
Biglari Holdings vs. American Rebel Holdings
Performance |
| Timeline |
| Biglari Holdings |
| American Rebel Holdings |
Biglari Holdings and American Rebel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and American Rebel
The main advantage of trading using opposite Biglari Holdings and American Rebel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings 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.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| American Rebel vs. VF Corporation | American Rebel vs. Levi Strauss Co | American Rebel vs. Under Armour A | American Rebel vs. Oxford Industries |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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