Correlation Between AMCON Distributing and DHI
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and DHI 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 DHI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and DHI Group, you can compare the effects of market volatilities on AMCON Distributing and DHI 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 DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and DHI.
Diversification Opportunities for AMCON Distributing and DHI
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMCON and DHI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group 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 DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and DHI go up and down completely randomly.
Pair Corralation between AMCON Distributing and DHI
Considering the 90-day investment horizon AMCON Distributing is expected to generate 0.81 times more return on investment than DHI. However, AMCON Distributing is 1.23 times less risky than DHI. It trades about 0.0 of its potential returns per unit of risk. DHI Group is currently generating about -0.03 per unit of risk. If you would invest 18,317 in AMCON Distributing on September 4, 2024 and sell it today you would lose (4,910) from holding AMCON Distributing or give up 26.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
AMCON Distributing vs. DHI Group
Performance |
| Timeline |
| AMCON Distributing |
| DHI Group |
AMCON Distributing and DHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and DHI
The main advantage of trading using opposite AMCON Distributing and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI'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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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