Correlation Between AMCON Distributing and Kroger
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Kroger 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 Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Kroger Company, you can compare the effects of market volatilities on AMCON Distributing and Kroger 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 Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Kroger.
Diversification Opportunities for AMCON Distributing and Kroger
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMCON and Kroger is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company 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 Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kroger Company has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Kroger go up and down completely randomly.
Pair Corralation between AMCON Distributing and Kroger
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Kroger. In addition to that, AMCON Distributing is 3.98 times more volatile than Kroger Company. It trades about -0.04 of its total potential returns per unit of risk. Kroger Company is currently generating about 0.15 per unit of volatility. If you would invest 5,680 in Kroger Company on August 27, 2024 and sell it today you would earn a total of 242.00 from holding Kroger Company or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Kroger Company
Performance |
| Timeline |
| AMCON Distributing |
| Kroger Company |
AMCON Distributing and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Kroger
The main advantage of trading using opposite AMCON Distributing and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Rocky Brands |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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