Correlation Between AMCON Distributing and Black Hills
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Black Hills 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 Black Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Black Hills, you can compare the effects of market volatilities on AMCON Distributing and Black Hills 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 Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Black Hills.
Diversification Opportunities for AMCON Distributing and Black Hills
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMCON and Black is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills 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 Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Black Hills go up and down completely randomly.
Pair Corralation between AMCON Distributing and Black Hills
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Black Hills. In addition to that, AMCON Distributing is 3.66 times more volatile than Black Hills. It trades about -0.05 of its total potential returns per unit of risk. Black Hills is currently generating about 0.23 per unit of volatility. If you would invest 5,979 in Black Hills on August 25, 2024 and sell it today you would earn a total of 452.00 from holding Black Hills or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Black Hills
Performance |
| Timeline |
| AMCON Distributing |
| Black Hills |
AMCON Distributing and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Black Hills
The main advantage of trading using opposite AMCON Distributing and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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