Correlation Between American Rebel and Samsonite International

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

Diversification Opportunities for American Rebel and Samsonite International

0.16

Correlation Coefficient

American Rebel  Samsonite International

Average diversification

The 3 months correlation between American and Samsonite is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Rebel Holdings and Samsonite International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsonite International 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 Samsonite International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsonite International has no effect on the direction of American Rebel i.e., American Rebel and Samsonite International go up and down completely randomly.

Pair Corralation between American Rebel and Samsonite International

Assuming the 90 days horizon American Rebel Holdings is expected to generate 46.95 times more return on investment than Samsonite International. However, American Rebel is 46.95 times more volatile than Samsonite International SA. It trades about 0.13 of its potential returns per unit of risk. Samsonite International SA is currently generating about 0.05 per unit of risk. If you would invest  1.50  in American Rebel Holdings on August 31, 2024 and sell it today you would lose (0.68) from holding American Rebel Holdings or give up 45.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.89%
Values	Daily Returns

American Rebel Holdings  vs.  Samsonite International SA

American Rebel Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Rebel Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, American Rebel showed solid returns over the last few months and may actually be approaching a breakup point.

Samsonite International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samsonite International SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Samsonite International may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with American Rebel and Samsonite International

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

The idea behind American Rebel Holdings and Samsonite International SA 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.