Correlation Between American Rebel and PUMA SE

Can any of the company-specific risk be diversified away by investing in both American Rebel and PUMA SE 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 Rebel and PUMA SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Rebel Holdings and PUMA SE, you can compare the effects of market volatilities on American Rebel and PUMA SE 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 Rebel with a short position of PUMA SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Rebel and PUMA SE.

Diversification Opportunities for American Rebel and PUMA SE

-0.41

Correlation Coefficient

American Rebel  PUMA SE

Very good diversification

The 3 months correlation between American and PUMA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding American Rebel Holdings and PUMA SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA SE and American Rebel 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 Rebel Holdings are associated (or correlated) with PUMA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA SE has no effect on the direction of American Rebel i.e., American Rebel and PUMA SE go up and down completely randomly.

Pair Corralation between American Rebel and PUMA SE

Given the investment horizon of 90 days American Rebel Holdings is expected to under-perform the PUMA SE. In addition to that, American Rebel is 5.88 times more volatile than PUMA SE. It trades about -0.05 of its total potential returns per unit of risk. PUMA SE is currently generating about 0.04 per unit of volatility. If you would invest  431.00  in PUMA SE on September 4, 2024 and sell it today you would earn a total of  19.00  from holding PUMA SE or generate 4.41% return on investment over 90 days.

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

American Rebel Holdings  vs.  PUMA SE

American Rebel Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Rebel Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PUMA SE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PUMA SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PUMA SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with American Rebel and PUMA SE

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

The idea behind American Rebel Holdings and PUMA SE 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.

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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.