Correlation Between AMCON Distributing and BBB Foods
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and BBB Foods 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 BBB Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and BBB Foods, you can compare the effects of market volatilities on AMCON Distributing and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and BBB Foods.
Diversification Opportunities for AMCON Distributing and BBB Foods
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMCON and BBB is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and BBB Foods go up and down completely randomly.
Pair Corralation between AMCON Distributing and BBB Foods
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the BBB Foods. In addition to that, AMCON Distributing is 1.36 times more volatile than BBB Foods. It trades about -0.02 of its total potential returns per unit of risk. BBB Foods is currently generating about 0.02 per unit of volatility. If you would invest 2,992 in BBB Foods on November 2, 2024 and sell it today you would earn a total of 41.00 from holding BBB Foods or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.06% |
| Values | Daily Returns |
AMCON Distributing vs. BBB Foods
Performance |
| Timeline |
| AMCON Distributing |
| BBB Foods |
AMCON Distributing and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and BBB Foods
The main advantage of trading using opposite AMCON Distributing and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' 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 |
| BBB Foods vs. AMCON Distributing | BBB Foods vs. Discover Financial Services | BBB Foods vs. Cheche Group Class | BBB Foods vs. Commonwealth Bank of |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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