Correlation Between AMCON Distributing and Ross Stores
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Ross Stores 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 Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Ross Stores, you can compare the effects of market volatilities on AMCON Distributing and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Ross Stores.
Diversification Opportunities for AMCON Distributing and Ross Stores
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMCON and Ross is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Ross Stores go up and down completely randomly.
Pair Corralation between AMCON Distributing and Ross Stores
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Ross Stores. In addition to that, AMCON Distributing is 2.47 times more volatile than Ross Stores. It trades about 0.0 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.04 per unit of volatility. If you would invest 11,431 in Ross Stores on August 27, 2024 and sell it today you would earn a total of 3,178 from holding Ross Stores or generate 27.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.99% |
| Values | Daily Returns |
AMCON Distributing vs. Ross Stores
Performance |
| Timeline |
| AMCON Distributing |
| Ross Stores |
AMCON Distributing and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Ross Stores
The main advantage of trading using opposite AMCON Distributing and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Rocky Brands |
| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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