Correlation Between American Rebel and AppTech Payments

Can any of the company-specific risk be diversified away by investing in both American Rebel and AppTech Payments 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 AppTech Payments 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 AppTech Payments Corp, you can compare the effects of market volatilities on American Rebel and AppTech Payments 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 AppTech Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Rebel and AppTech Payments.

Diversification Opportunities for American Rebel and AppTech Payments

0.2

Correlation Coefficient

American Rebel  AppTech Payments

Modest diversification

The 3 months correlation between American and AppTech is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding American Rebel Holdings and AppTech Payments Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppTech Payments Corp 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 AppTech Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppTech Payments Corp has no effect on the direction of American Rebel i.e., American Rebel and AppTech Payments go up and down completely randomly.

Pair Corralation between American Rebel and AppTech Payments

Assuming the 90 days horizon American Rebel Holdings is expected to generate 1.48 times more return on investment than AppTech Payments. However, American Rebel is 1.48 times more volatile than AppTech Payments Corp. It trades about 0.13 of its potential returns per unit of risk. AppTech Payments Corp is currently generating about 0.08 per unit of risk. If you would invest  1.75  in American Rebel Holdings on September 14, 2024 and sell it today you would lose (0.89) from holding American Rebel Holdings or give up 50.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.5%
Values	Daily Returns

American Rebel Holdings  vs.  AppTech Payments Corp

American Rebel Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Rebel Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental drivers, American Rebel showed solid returns over the last few months and may actually be approaching a breakup point.

AppTech Payments Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AppTech Payments Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, AppTech Payments is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with American Rebel and AppTech Payments

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

The idea behind American Rebel Holdings and AppTech Payments Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.