Correlation Between American Rebel and NextNav Warrant

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

Diversification Opportunities for American Rebel and NextNav Warrant

-0.43

Correlation Coefficient

American Rebel  NextNav Warrant

Very good diversification

The 3 months correlation between American and NextNav is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding American Rebel Holdings and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant 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 NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of American Rebel i.e., American Rebel and NextNav Warrant go up and down completely randomly.

Pair Corralation between American Rebel and NextNav Warrant

Assuming the 90 days horizon American Rebel Holdings is expected to under-perform the NextNav Warrant. In addition to that, American Rebel is 2.75 times more volatile than NextNav Warrant. It trades about -0.12 of its total potential returns per unit of risk. NextNav Warrant is currently generating about 0.25 per unit of volatility. If you would invest  489.00  in NextNav Warrant on September 5, 2024 and sell it today you would earn a total of  144.00  from holding NextNav Warrant or generate 29.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	86.36%
Values	Daily Returns

American Rebel Holdings  vs.  NextNav Warrant

American Rebel Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Rebel Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, American Rebel showed solid returns over the last few months and may actually be approaching a breakup point.

NextNav Warrant

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NextNav Warrant are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NextNav Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Rebel and NextNav Warrant

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

The idea behind American Rebel Holdings and NextNav Warrant 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.