Correlation Between Dream Finders and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Dream Finders 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 Dream Finders and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Finders Homes and AMCON Distributing, you can compare the effects of market volatilities on Dream Finders 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 Dream Finders with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Finders and AMCON Distributing.
Diversification Opportunities for Dream Finders and AMCON Distributing
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dream and AMCON is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dream Finders Homes and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Dream Finders 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 Dream Finders Homes 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 Dream Finders i.e., Dream Finders and AMCON Distributing go up and down completely randomly.
Pair Corralation between Dream Finders and AMCON Distributing
Considering the 90-day investment horizon Dream Finders is expected to generate 1.15 times less return on investment than AMCON Distributing. But when comparing it to its historical volatility, Dream Finders Homes is 1.43 times less risky than AMCON Distributing. It trades about 0.11 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,285 in AMCON Distributing on September 5, 2024 and sell it today you would earn a total of 1,015 from holding AMCON Distributing or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Finders Homes vs. AMCON Distributing
Performance |
| Timeline |
| Dream Finders Homes |
| AMCON Distributing |
Dream Finders and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Finders and AMCON Distributing
The main advantage of trading using opposite Dream Finders and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Finders 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.| Dream Finders vs. Api Group Corp | Dream Finders vs. MYR Group | Dream Finders vs. Comfort Systems USA | Dream Finders vs. Arcosa Inc |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |