Correlation Between AMCON Distributing and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Whitbread Plc 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 Whitbread Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Whitbread plc, you can compare the effects of market volatilities on AMCON Distributing and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Whitbread Plc.
Diversification Opportunities for AMCON Distributing and Whitbread Plc
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMCON and Whitbread is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Whitbread Plc go up and down completely randomly.
Pair Corralation between AMCON Distributing and Whitbread Plc
Considering the 90-day investment horizon AMCON Distributing is expected to generate 1.64 times more return on investment than Whitbread Plc. However, AMCON Distributing is 1.64 times more volatile than Whitbread plc. It trades about -0.02 of its potential returns per unit of risk. Whitbread plc is currently generating about -0.04 per unit of risk. If you would invest 18,497 in AMCON Distributing on September 14, 2024 and sell it today you would lose (4,897) from holding AMCON Distributing or give up 26.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 66.8% |
| Values | Daily Returns |
AMCON Distributing vs. Whitbread plc
Performance |
| Timeline |
| AMCON Distributing |
| Whitbread plc |
AMCON Distributing and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Whitbread Plc
The main advantage of trading using opposite AMCON Distributing and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Wolverine World Wide |
| Whitbread Plc vs. Western Acquisition Ventures | Whitbread Plc vs. Transocean | Whitbread Plc vs. Rand Capital Corp | Whitbread Plc vs. Awilco Drilling PLC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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