Correlation Between AMCON Distributing and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and CNH Industrial 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 CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and CNH Industrial NV, you can compare the effects of market volatilities on AMCON Distributing and CNH Industrial 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 CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and CNH Industrial.
Diversification Opportunities for AMCON Distributing and CNH Industrial
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AMCON and CNH is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV 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 CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and CNH Industrial go up and down completely randomly.
Pair Corralation between AMCON Distributing and CNH Industrial
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the CNH Industrial. In addition to that, AMCON Distributing is 2.15 times more volatile than CNH Industrial NV. It trades about -0.13 of its total potential returns per unit of risk. CNH Industrial NV is currently generating about 0.43 per unit of volatility. If you would invest 1,100 in CNH Industrial NV on October 20, 2024 and sell it today you would earn a total of 127.00 from holding CNH Industrial NV or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. CNH Industrial NV
Performance |
| Timeline |
| AMCON Distributing |
| CNH Industrial NV |
AMCON Distributing and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and CNH Industrial
The main advantage of trading using opposite AMCON Distributing and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's 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 |
| CNH Industrial vs. Cresud SACIF y | CNH Industrial vs. BBB Foods | CNH Industrial vs. The Andersons | CNH Industrial 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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