Correlation Between AMCON Distributing and Heineken
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Heineken 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 Heineken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Heineken NV, you can compare the effects of market volatilities on AMCON Distributing and Heineken 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 Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Heineken.
Diversification Opportunities for AMCON Distributing and Heineken
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMCON and Heineken is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken 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 Heineken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken NV has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Heineken go up and down completely randomly.
Pair Corralation between AMCON Distributing and Heineken
Considering the 90-day investment horizon AMCON Distributing is expected to generate 4.14 times more return on investment than Heineken. However, AMCON Distributing is 4.14 times more volatile than Heineken NV. It trades about 0.06 of its potential returns per unit of risk. Heineken NV is currently generating about -0.51 per unit of risk. If you would invest 12,963 in AMCON Distributing on August 30, 2024 and sell it today you would earn a total of 519.00 from holding AMCON Distributing or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Heineken NV
Performance |
| Timeline |
| AMCON Distributing |
| Heineken NV |
AMCON Distributing and Heineken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Heineken
The main advantage of trading using opposite AMCON Distributing and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Heineken 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 Heineken will offset losses from the drop in Heineken'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 |
| Heineken vs. Anheuser Busch InBev SANV | Heineken vs. Tsingtao Brewery Co | Heineken vs. Carlsberg AS | Heineken vs. Heineken Holding NV |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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