Correlation Between Asics Corp and American Rebel

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

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

Diversification Opportunities for Asics Corp and American Rebel

0.55

Correlation Coefficient

Asics Corp  American Rebel

Very weak diversification

The 3 months correlation between Asics and American is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Asics Corp ADR and American Rebel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Rebel Holdings and Asics Corp 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 Asics Corp ADR are associated (or correlated) with American Rebel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Rebel Holdings has no effect on the direction of Asics Corp i.e., Asics Corp and American Rebel go up and down completely randomly.

Pair Corralation between Asics Corp and American Rebel

Assuming the 90 days horizon Asics Corp ADR is expected to generate 0.19 times more return on investment than American Rebel. However, Asics Corp ADR is 5.2 times less risky than American Rebel. It trades about 0.01 of its potential returns per unit of risk. American Rebel Holdings is currently generating about -0.04 per unit of risk. If you would invest  1,966  in Asics Corp ADR on August 31, 2024 and sell it today you would lose (4.00) from holding Asics Corp ADR or give up 0.2% of portfolio value over 90 days.

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

Asics Corp ADR  vs.  American Rebel Holdings

Asics Corp ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asics Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Asics Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Asics Corp and American Rebel

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

The idea behind Asics Corp ADR and American Rebel Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.