Correlation Between AMCON Distributing and SkyWest
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and SkyWest 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 SkyWest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and SkyWest, you can compare the effects of market volatilities on AMCON Distributing and SkyWest 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 SkyWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and SkyWest.
Diversification Opportunities for AMCON Distributing and SkyWest
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMCON and SkyWest is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and SkyWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyWest 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 SkyWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkyWest has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and SkyWest go up and down completely randomly.
Pair Corralation between AMCON Distributing and SkyWest
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the SkyWest. In addition to that, AMCON Distributing is 1.23 times more volatile than SkyWest. It trades about 0.0 of its total potential returns per unit of risk. SkyWest is currently generating about 0.15 per unit of volatility. If you would invest 1,847 in SkyWest on September 3, 2024 and sell it today you would earn a total of 9,627 from holding SkyWest or generate 521.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
AMCON Distributing vs. SkyWest
Performance |
| Timeline |
| AMCON Distributing |
| SkyWest |
AMCON Distributing and SkyWest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and SkyWest
The main advantage of trading using opposite AMCON Distributing and SkyWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, SkyWest 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 SkyWest will offset losses from the drop in SkyWest's 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 |
| SkyWest vs. Copa Holdings SA | SkyWest vs. Sun Country Airlines | SkyWest vs. Air Transport Services | SkyWest vs. Frontier Group Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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