Correlation Between Mach Natural and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Mach Natural 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 Mach Natural and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mach Natural Resources and AMCON Distributing, you can compare the effects of market volatilities on Mach Natural 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 Mach Natural with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mach Natural and AMCON Distributing.
Diversification Opportunities for Mach Natural and AMCON Distributing
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mach and AMCON is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mach Natural Resources and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Mach Natural 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 Mach Natural Resources 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 Mach Natural i.e., Mach Natural and AMCON Distributing go up and down completely randomly.
Pair Corralation between Mach Natural and AMCON Distributing
Considering the 90-day investment horizon Mach Natural Resources is expected to generate 0.31 times more return on investment than AMCON Distributing. However, Mach Natural Resources is 3.19 times less risky than AMCON Distributing. It trades about 0.19 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.01 per unit of risk. If you would invest 1,710 in Mach Natural Resources on November 5, 2024 and sell it today you would earn a total of 70.00 from holding Mach Natural Resources or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mach Natural Resources vs. AMCON Distributing
Performance |
| Timeline |
| Mach Natural Resources |
| AMCON Distributing |
Mach Natural and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mach Natural and AMCON Distributing
The main advantage of trading using opposite Mach Natural and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mach Natural 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.| Mach Natural vs. Rocky Brands | Mach Natural vs. JBG SMITH Properties | Mach Natural vs. HNI Corp | Mach Natural vs. Envista Holdings Corp |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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