Correlation Between Evans Bancorp and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Evans Bancorp and AMCON Distributing 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 Evans Bancorp and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evans Bancorp and AMCON Distributing, you can compare the effects of market volatilities on Evans Bancorp and AMCON Distributing 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 Evans Bancorp with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evans Bancorp and AMCON Distributing.
Diversification Opportunities for Evans Bancorp and AMCON Distributing
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evans and AMCON is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Evans Bancorp and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Evans Bancorp 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 Evans Bancorp are associated (or correlated) with AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Evans Bancorp i.e., Evans Bancorp and AMCON Distributing go up and down completely randomly.
Pair Corralation between Evans Bancorp and AMCON Distributing
Given the investment horizon of 90 days Evans Bancorp is expected to generate 2.36 times less return on investment than AMCON Distributing. But when comparing it to its historical volatility, Evans Bancorp is 2.63 times less risky than AMCON Distributing. It trades about 0.18 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 13,002 in AMCON Distributing on November 9, 2024 and sell it today you would earn a total of 1,908 from holding AMCON Distributing or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evans Bancorp vs. AMCON Distributing
Performance |
| Timeline |
| Evans Bancorp |
| AMCON Distributing |
Evans Bancorp and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evans Bancorp and AMCON Distributing
The main advantage of trading using opposite Evans Bancorp and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evans Bancorp position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing's long position.| Evans Bancorp vs. First Community | Evans Bancorp vs. Oak Valley Bancorp | Evans Bancorp vs. First Financial Northwest | Evans Bancorp vs. ESSA Bancorp |
| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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