Correlation Between AMCON Distributing and Catalent
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Catalent 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 Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Catalent, you can compare the effects of market volatilities on AMCON Distributing and Catalent 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 Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Catalent.
Diversification Opportunities for AMCON Distributing and Catalent
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMCON and Catalent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent 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 Catalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalent has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Catalent go up and down completely randomly.
Pair Corralation between AMCON Distributing and Catalent
Considering the 90-day investment horizon AMCON Distributing is expected to generate 6.14 times more return on investment than Catalent. However, AMCON Distributing is 6.14 times more volatile than Catalent. It trades about 0.13 of its potential returns per unit of risk. Catalent is currently generating about 0.24 per unit of risk. If you would invest 11,987 in AMCON Distributing on September 1, 2024 and sell it today you would earn a total of 1,420 from holding AMCON Distributing or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Catalent
Performance |
| Timeline |
| AMCON Distributing |
| Catalent |
AMCON Distributing and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Catalent
The main advantage of trading using opposite AMCON Distributing and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Catalent 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 Catalent will offset losses from the drop in Catalent'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 |
| Catalent vs. Crinetics Pharmaceuticals | Catalent vs. Enanta Pharmaceuticals | Catalent vs. Amicus Therapeutics | Catalent vs. Connect Biopharma Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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