Correlation Between AMCON Distributing and Wabash National
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Wabash National 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 Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Wabash National, you can compare the effects of market volatilities on AMCON Distributing and Wabash National 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 Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Wabash National.
Diversification Opportunities for AMCON Distributing and Wabash National
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMCON and Wabash is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National 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 Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Wabash National go up and down completely randomly.
Pair Corralation between AMCON Distributing and Wabash National
Considering the 90-day investment horizon AMCON Distributing is expected to generate 2.14 times more return on investment than Wabash National. However, AMCON Distributing is 2.14 times more volatile than Wabash National. It trades about 0.14 of its potential returns per unit of risk. Wabash National is currently generating about 0.02 per unit of risk. If you would invest 12,100 in AMCON Distributing on September 13, 2024 and sell it today you would earn a total of 1,513 from holding AMCON Distributing or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Wabash National
Performance |
| Timeline |
| AMCON Distributing |
| Wabash National |
AMCON Distributing and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Wabash National
The main advantage of trading using opposite AMCON Distributing and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Wolverine World Wide |
| Wabash National vs. Aquagold International | Wabash National vs. Thrivent High Yield | Wabash National vs. Morningstar Unconstrained Allocation | Wabash National vs. Via Renewables |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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