Correlation Between Ree Automotive and American Rebel

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

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

Diversification Opportunities for Ree Automotive and American Rebel

-0.53

Correlation Coefficient

Ree Automotive  American Rebel

Excellent diversification

The 3 months correlation between Ree and American is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ree Automotive Holding 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 Ree Automotive 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 Ree Automotive Holding 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 Ree Automotive i.e., Ree Automotive and American Rebel go up and down completely randomly.

Pair Corralation between Ree Automotive and American Rebel

Considering the 90-day investment horizon Ree Automotive Holding is expected to generate 0.73 times more return on investment than American Rebel. However, Ree Automotive Holding is 1.36 times less risky than American Rebel. It trades about 0.2 of its potential returns per unit of risk. American Rebel Holdings is currently generating about -0.05 per unit of risk. If you would invest  325.00  in Ree Automotive Holding on September 4, 2024 and sell it today you would earn a total of  469.00  from holding Ree Automotive Holding or generate 144.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Ree Automotive Holding  vs.  American Rebel Holdings

Ree Automotive Holding

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ree Automotive Holding are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Ree Automotive exhibited solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Ree Automotive and American Rebel

The main advantage of trading using opposite Ree Automotive and American Rebel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ree Automotive 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 Ree Automotive Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.