Correlation Between AMCON Distributing and Monro Muffler
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Monro Muffler 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 Monro Muffler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Monro Muffler Brake, you can compare the effects of market volatilities on AMCON Distributing and Monro Muffler 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 Monro Muffler. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Monro Muffler.
Diversification Opportunities for AMCON Distributing and Monro Muffler
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMCON and Monro is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Monro Muffler Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monro Muffler Brake 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 Monro Muffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monro Muffler Brake has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Monro Muffler go up and down completely randomly.
Pair Corralation between AMCON Distributing and Monro Muffler
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Monro Muffler. In addition to that, AMCON Distributing is 2.42 times more volatile than Monro Muffler Brake. It trades about -0.04 of its total potential returns per unit of risk. Monro Muffler Brake is currently generating about -0.05 per unit of volatility. If you would invest 2,786 in Monro Muffler Brake on August 27, 2024 and sell it today you would lose (82.00) from holding Monro Muffler Brake or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Monro Muffler Brake
Performance |
| Timeline |
| AMCON Distributing |
| Monro Muffler Brake |
AMCON Distributing and Monro Muffler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Monro Muffler
The main advantage of trading using opposite AMCON Distributing and Monro Muffler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Monro Muffler 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 Monro Muffler will offset losses from the drop in Monro Muffler's long position.| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Rocky Brands |
| Monro Muffler vs. Motorcar Parts of | Monro Muffler vs. Standard Motor Products | Monro Muffler vs. Stoneridge | Monro Muffler vs. Douglas Dynamics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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