Correlation Between AMCON Distributing and Zhongsheng Group
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing and Zhongsheng Group 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 Zhongsheng Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Zhongsheng Group Holdings, you can compare the effects of market volatilities on AMCON Distributing and Zhongsheng Group 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 Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Zhongsheng Group.
Diversification Opportunities for AMCON Distributing and Zhongsheng Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMCON and Zhongsheng is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Zhongsheng Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongsheng Group Holdings 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 Zhongsheng Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongsheng Group Holdings has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Zhongsheng Group go up and down completely randomly.
Pair Corralation between AMCON Distributing and Zhongsheng Group
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Zhongsheng Group. But the stock apears to be less risky and, when comparing its historical volatility, AMCON Distributing is 1.25 times less risky than Zhongsheng Group. The stock trades about -0.02 of its potential returns per unit of risk. The Zhongsheng Group Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,537 in Zhongsheng Group Holdings on August 28, 2024 and sell it today you would earn a total of 601.00 from holding Zhongsheng Group Holdings or generate 39.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Zhongsheng Group Holdings
Performance |
| Timeline |
| AMCON Distributing |
| Zhongsheng Group Holdings |
AMCON Distributing and Zhongsheng Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Zhongsheng Group
The main advantage of trading using opposite AMCON Distributing and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Zhongsheng Group 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 Zhongsheng Group will offset losses from the drop in Zhongsheng Group'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 |
| Zhongsheng Group vs. Vroom Inc | Zhongsheng Group vs. CarMax Inc | Zhongsheng Group vs. SunCar Technology Group | Zhongsheng Group vs. U Power Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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