Correlation Between American Rebel and Nike

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

Diversification Opportunities for American Rebel and Nike

-0.03

Correlation Coefficient

American Rebel  Nike

Good diversification

The 3 months correlation between American and Nike is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding American Rebel Holdings and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of American Rebel i.e., American Rebel and Nike go up and down completely randomly.

Pair Corralation between American Rebel and Nike

Given the investment horizon of 90 days American Rebel Holdings is expected to under-perform the Nike. In addition to that, American Rebel is 5.56 times more volatile than Nike Inc. It trades about -0.36 of its total potential returns per unit of risk. Nike Inc is currently generating about -0.09 per unit of volatility. If you would invest  7,427  in Nike Inc on December 28, 2024 and sell it today you would lose (847.00) from holding Nike Inc or give up 11.4% of portfolio value over 90 days.

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

American Rebel Holdings  vs.  Nike Inc

American Rebel Holdings

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nike Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nike Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with American Rebel and Nike

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

The idea behind American Rebel Holdings and Nike Inc 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 Stocks Directory module to find actively traded stocks across global markets.