Correlation Between AMCON Distributing and Groove Botanicals
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Groove Botanicals 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 Groove Botanicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Groove Botanicals, you can compare the effects of market volatilities on AMCON Distributing and Groove Botanicals 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 Groove Botanicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Groove Botanicals.
Diversification Opportunities for AMCON Distributing and Groove Botanicals
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMCON and Groove is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Groove Botanicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groove Botanicals 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 Groove Botanicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groove Botanicals has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Groove Botanicals go up and down completely randomly.
Pair Corralation between AMCON Distributing and Groove Botanicals
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Groove Botanicals. But the stock apears to be less risky and, when comparing its historical volatility, AMCON Distributing is 7.01 times less risky than Groove Botanicals. The stock trades about 0.0 of its potential returns per unit of risk. The Groove Botanicals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.98 in Groove Botanicals on August 26, 2024 and sell it today you would lose (5.49) from holding Groove Botanicals or give up 91.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
AMCON Distributing vs. Groove Botanicals
Performance |
| Timeline |
| AMCON Distributing |
| Groove Botanicals |
AMCON Distributing and Groove Botanicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Groove Botanicals
The main advantage of trading using opposite AMCON Distributing and Groove Botanicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Groove Botanicals 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 Groove Botanicals will offset losses from the drop in Groove Botanicals' 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 |
| Groove Botanicals vs. Embotelladora Andina SA | Groove Botanicals vs. Signet International Holdings | Groove Botanicals vs. National Beverage Corp | Groove Botanicals vs. PT Astra International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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