Correlation Between AMCON Distributing and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and BJs Wholesale 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 AMCON Distributing and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and BJs Wholesale Club, you can compare the effects of market volatilities on AMCON Distributing and BJs Wholesale 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 AMCON Distributing with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and BJs Wholesale.
Diversification Opportunities for AMCON Distributing and BJs Wholesale
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMCON and BJs is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and AMCON Distributing 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 AMCON Distributing are associated (or correlated) with BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and BJs Wholesale go up and down completely randomly.
Pair Corralation between AMCON Distributing and BJs Wholesale
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the BJs Wholesale. In addition to that, AMCON Distributing is 2.04 times more volatile than BJs Wholesale Club. It trades about 0.0 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.05 per unit of volatility. If you would invest 6,975 in BJs Wholesale Club on August 27, 2024 and sell it today you would earn a total of 2,699 from holding BJs Wholesale Club or generate 38.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
AMCON Distributing vs. BJs Wholesale Club
Performance |
| Timeline |
| AMCON Distributing |
| BJs Wholesale Club |
AMCON Distributing and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and BJs Wholesale
The main advantage of trading using opposite AMCON Distributing and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale's long position.| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Rocky Brands |
| BJs Wholesale vs. Innovative Food Hldg | BJs Wholesale vs. Calavo Growers | BJs Wholesale vs. The Chefs Warehouse | BJs Wholesale vs. AMCON Distributing |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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