Correlation Between Servotronics and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Servotronics 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 Servotronics and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Servotronics and AMCON Distributing, you can compare the effects of market volatilities on Servotronics 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 Servotronics with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Servotronics and AMCON Distributing.
Diversification Opportunities for Servotronics and AMCON Distributing
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Servotronics and AMCON is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Servotronics and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Servotronics 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 Servotronics 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 Servotronics i.e., Servotronics and AMCON Distributing go up and down completely randomly.
Pair Corralation between Servotronics and AMCON Distributing
Considering the 90-day investment horizon Servotronics is expected to under-perform the AMCON Distributing. But the stock apears to be less risky and, when comparing its historical volatility, Servotronics is 1.84 times less risky than AMCON Distributing. The stock trades about -0.23 of its potential returns per unit of risk. The AMCON Distributing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 12,494 in AMCON Distributing on August 31, 2024 and sell it today you would earn a total of 913.00 from holding AMCON Distributing or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Servotronics vs. AMCON Distributing
Performance |
| Timeline |
| Servotronics |
| AMCON Distributing |
Servotronics and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Servotronics and AMCON Distributing
The main advantage of trading using opposite Servotronics and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Servotronics 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.| Servotronics vs. Energizer Holdings | Servotronics vs. Acuity Brands | Servotronics vs. Espey Mfg Electronics | Servotronics vs. Preformed Line Products |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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