Correlation Between AMCON Distributing and XChange TECINC
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and XChange TECINC 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 XChange TECINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and XChange TECINC, you can compare the effects of market volatilities on AMCON Distributing and XChange TECINC 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 XChange TECINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and XChange TECINC.
Diversification Opportunities for AMCON Distributing and XChange TECINC
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMCON and XChange is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and XChange TECINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XChange TECINC 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 XChange TECINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XChange TECINC has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and XChange TECINC go up and down completely randomly.
Pair Corralation between AMCON Distributing and XChange TECINC
Considering the 90-day investment horizon AMCON Distributing is expected to generate 0.21 times more return on investment than XChange TECINC. However, AMCON Distributing is 4.86 times less risky than XChange TECINC. It trades about 0.0 of its potential returns per unit of risk. XChange TECINC is currently generating about -0.03 per unit of risk. If you would invest 18,146 in AMCON Distributing on September 12, 2024 and sell it today you would lose (4,246) from holding AMCON Distributing or give up 23.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
AMCON Distributing vs. XChange TECINC
Performance |
| Timeline |
| AMCON Distributing |
| XChange TECINC |
AMCON Distributing and XChange TECINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and XChange TECINC
The main advantage of trading using opposite AMCON Distributing and XChange TECINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, XChange TECINC 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 XChange TECINC will offset losses from the drop in XChange TECINC'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 |
| XChange TECINC vs. FitLife Brands, Common | XChange TECINC vs. AMCON Distributing | XChange TECINC vs. Bridgford Foods | XChange TECINC vs. NH Foods Ltd |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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