Correlation Between AMCON Distributing and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and LithiumBank Resources 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 LithiumBank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and LithiumBank Resources Corp, you can compare the effects of market volatilities on AMCON Distributing and LithiumBank Resources 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 LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and LithiumBank Resources.
Diversification Opportunities for AMCON Distributing and LithiumBank Resources
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMCON and LithiumBank is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources 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 LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and LithiumBank Resources go up and down completely randomly.
Pair Corralation between AMCON Distributing and LithiumBank Resources
Considering the 90-day investment horizon AMCON Distributing is expected to generate 1.3 times more return on investment than LithiumBank Resources. However, AMCON Distributing is 1.3 times more volatile than LithiumBank Resources Corp. It trades about 0.03 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about -0.27 per unit of risk. If you would invest 13,285 in AMCON Distributing on September 4, 2024 and sell it today you would earn a total of 122.00 from holding AMCON Distributing or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
AMCON Distributing vs. LithiumBank Resources Corp
Performance |
| Timeline |
| AMCON Distributing |
| LithiumBank Resources |
AMCON Distributing and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and LithiumBank Resources
The main advantage of trading using opposite AMCON Distributing and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, LithiumBank Resources 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 LithiumBank Resources will offset losses from the drop in LithiumBank Resources' 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 |
| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Avarone Metals | LithiumBank Resources vs. Adriatic Metals PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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