Correlation Between AMCON Distributing and Northern Lion
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Northern Lion 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 Northern Lion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Northern Lion Gold, you can compare the effects of market volatilities on AMCON Distributing and Northern Lion 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 Northern Lion. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Northern Lion.
Diversification Opportunities for AMCON Distributing and Northern Lion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMCON and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Northern Lion Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lion Gold 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 Northern Lion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lion Gold has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Northern Lion go up and down completely randomly.
Pair Corralation between AMCON Distributing and Northern Lion
Considering the 90-day investment horizon AMCON Distributing is expected to generate 1.89 times more return on investment than Northern Lion. However, AMCON Distributing is 1.89 times more volatile than Northern Lion Gold. It trades about 0.0 of its potential returns per unit of risk. Northern Lion Gold is currently generating about -0.04 per unit of risk. If you would invest 18,124 in AMCON Distributing on September 14, 2024 and sell it today you would lose (4,524) from holding AMCON Distributing or give up 24.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
AMCON Distributing vs. Northern Lion Gold
Performance |
| Timeline |
| AMCON Distributing |
| Northern Lion Gold |
AMCON Distributing and Northern Lion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Northern Lion
The main advantage of trading using opposite AMCON Distributing and Northern Lion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Northern Lion 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 Northern Lion will offset losses from the drop in Northern Lion's long position.| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Wolverine World Wide |
| Northern Lion vs. NH Foods Ltd | Northern Lion vs. FitLife Brands, Common | Northern Lion vs. AMCON Distributing | Northern Lion vs. IPG Photonics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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