Correlation Between Andersons and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Andersons and AMCON Distributing 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 Andersons and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Andersons and AMCON Distributing, you can compare the effects of market volatilities on Andersons and AMCON Distributing 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 Andersons with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andersons and AMCON Distributing.
Diversification Opportunities for Andersons and AMCON Distributing
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Andersons and AMCON is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Andersons and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Andersons 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 The Andersons are associated (or correlated) with AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Andersons i.e., Andersons and AMCON Distributing go up and down completely randomly.
Pair Corralation between Andersons and AMCON Distributing
Given the investment horizon of 90 days The Andersons is expected to generate 0.62 times more return on investment than AMCON Distributing. However, The Andersons is 1.6 times less risky than AMCON Distributing. It trades about 0.07 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.02 per unit of risk. If you would invest 4,725 in The Andersons on August 27, 2024 and sell it today you would earn a total of 185.00 from holding The Andersons or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Andersons vs. AMCON Distributing
Performance |
| Timeline |
| Andersons |
| AMCON Distributing |
Andersons and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andersons and AMCON Distributing
The main advantage of trading using opposite Andersons and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andersons position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing's long position.| Andersons vs. Calavo Growers | Andersons vs. SpartanNash Co | Andersons vs. The Chefs Warehouse | Andersons vs. Hf Foods Group |
| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Rocky Brands |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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