Correlation Between Digital Brands and American Rebel
Can any of the company-specific risk be diversified away by investing in both Digital Brands 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 Digital Brands and American Rebel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Brands Group and American Rebel Holdings, you can compare the effects of market volatilities on Digital Brands 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 Digital Brands with a short position of American Rebel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Brands and American Rebel.
Diversification Opportunities for Digital Brands and American Rebel
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Digital and American is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Digital Brands Group 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 Digital Brands 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 Digital Brands Group 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 Digital Brands i.e., Digital Brands and American Rebel go up and down completely randomly.
Pair Corralation between Digital Brands and American Rebel
Given the investment horizon of 90 days Digital Brands Group is expected to generate 19.26 times more return on investment than American Rebel. However, Digital Brands is 19.26 times more volatile than American Rebel Holdings. It trades about 0.21 of its potential returns per unit of risk. American Rebel Holdings is currently generating about 0.01 per unit of risk. If you would invest 13.00 in Digital Brands Group on September 13, 2024 and sell it today you would earn a total of 372.00 from holding Digital Brands Group or generate 2861.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Digital Brands Group vs. American Rebel Holdings
Performance |
| Timeline |
| Digital Brands Group |
| American Rebel Holdings |
Digital Brands and American Rebel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Brands and American Rebel
The main advantage of trading using opposite Digital Brands and American Rebel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Brands 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.| Digital Brands vs. Burlington Stores | Digital Brands vs. Urban Outfitters | Digital Brands vs. American Eagle Outfitters | Digital Brands vs. Childrens Place |
| American Rebel vs. Digital Brands Group | American Rebel vs. Data Storage | American Rebel vs. Auddia Inc | American Rebel vs. DatChat Series A |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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