Correlation Between AMCON Distributing and 92936UAC3

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Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and 92936UAC3 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 92936UAC3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and W P CAREY, you can compare the effects of market volatilities on AMCON Distributing and 92936UAC3 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 92936UAC3. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and 92936UAC3.

Diversification Opportunities for AMCON Distributing and 92936UAC3

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between AMCON and 92936UAC3 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and W P CAREY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W P CAREY 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 92936UAC3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W P CAREY has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and 92936UAC3 go up and down completely randomly.

Pair Corralation between AMCON Distributing and 92936UAC3

Considering the 90-day investment horizon AMCON Distributing is expected to generate 18.5 times more return on investment than 92936UAC3. However, AMCON Distributing is 18.5 times more volatile than W P CAREY. It trades about 0.0 of its potential returns per unit of risk. W P CAREY is currently generating about -0.05 per unit of risk. If you would invest  14,275  in AMCON Distributing on September 12, 2024 and sell it today you would lose (662.00) from holding AMCON Distributing or give up 4.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy87.1%
ValuesDaily Returns

AMCON Distributing  vs.  W P CAREY

 Performance 
       Timeline  
AMCON Distributing 

Risk-Adjusted Performance

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Over the last 90 days AMCON Distributing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, AMCON Distributing is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
W P CAREY 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days W P CAREY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 92936UAC3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AMCON Distributing and 92936UAC3 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AMCON Distributing and 92936UAC3

The main advantage of trading using opposite AMCON Distributing and 92936UAC3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, 92936UAC3 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 92936UAC3 will offset losses from the drop in 92936UAC3's long position.
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The idea behind AMCON Distributing and W P CAREY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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