Correlation Between Chefs Warehouse and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Chefs Warehouse 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 Chefs Warehouse 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 Chefs Warehouse and AMCON Distributing, you can compare the effects of market volatilities on Chefs Warehouse 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 Chefs Warehouse with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and AMCON Distributing.
Diversification Opportunities for Chefs Warehouse and AMCON Distributing
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chefs and AMCON is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Chefs Warehouse 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 Chefs Warehouse 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 Chefs Warehouse i.e., Chefs Warehouse and AMCON Distributing go up and down completely randomly.
Pair Corralation between Chefs Warehouse and AMCON Distributing
Given the investment horizon of 90 days The Chefs Warehouse is expected to generate 0.42 times more return on investment than AMCON Distributing. However, The Chefs Warehouse is 2.39 times less risky than AMCON Distributing. It trades about 0.21 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.08 per unit of risk. If you would invest 3,973 in The Chefs Warehouse on August 24, 2024 and sell it today you would earn a total of 413.00 from holding The Chefs Warehouse or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Chefs Warehouse vs. AMCON Distributing
Performance |
| Timeline |
| Chefs Warehouse |
| AMCON Distributing |
Chefs Warehouse and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chefs Warehouse and AMCON Distributing
The main advantage of trading using opposite Chefs Warehouse and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chefs Warehouse 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.| Chefs Warehouse vs. US Foods Holding | Chefs Warehouse vs. Sysco | Chefs Warehouse vs. SpartanNash Co | Chefs Warehouse vs. Calavo Growers |
| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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