Correlation Between Ree Automotive and Amer Sports,

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

Diversification Opportunities for Ree Automotive and Amer Sports,

0.31

Correlation Coefficient

Ree Automotive  Amer Sports,

Weak diversification

The 3 months correlation between Ree and Amer is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ree Automotive Holding and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, 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 Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Ree Automotive i.e., Ree Automotive and Amer Sports, go up and down completely randomly.

Pair Corralation between Ree Automotive and Amer Sports,

Considering the 90-day investment horizon Ree Automotive Holding is expected to under-perform the Amer Sports,. In addition to that, Ree Automotive is 2.18 times more volatile than Amer Sports,. It trades about -0.19 of its total potential returns per unit of risk. Amer Sports, is currently generating about 0.01 per unit of volatility. If you would invest  2,879  in Amer Sports, on December 25, 2024 and sell it today you would earn a total of  1.00  from holding Amer Sports, or generate 0.03% return on investment over 90 days.

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

Ree Automotive Holding  vs.  Amer Sports,

Ree Automotive Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ree Automotive Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Amer Sports,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Amer Sports, is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ree Automotive and Amer Sports,

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

The idea behind Ree Automotive Holding and Amer Sports, 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.