Correlation Between US Foods and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both US Foods 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 US Foods and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Foods Holding and AMCON Distributing, you can compare the effects of market volatilities on US Foods 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 US Foods with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Foods and AMCON Distributing.
Diversification Opportunities for US Foods and AMCON Distributing
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USFD and AMCON is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding US Foods Holding and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and US Foods 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 US Foods Holding 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 US Foods i.e., US Foods and AMCON Distributing go up and down completely randomly.
Pair Corralation between US Foods and AMCON Distributing
Given the investment horizon of 90 days US Foods Holding is expected to generate 0.25 times more return on investment than AMCON Distributing. However, US Foods Holding is 3.93 times less risky than AMCON Distributing. It trades about 0.35 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.08 per unit of risk. If you would invest 6,116 in US Foods Holding on August 24, 2024 and sell it today you would earn a total of 676.00 from holding US Foods Holding or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
US Foods Holding vs. AMCON Distributing
Performance |
| Timeline |
| US Foods Holding |
| AMCON Distributing |
US Foods and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Foods and AMCON Distributing
The main advantage of trading using opposite US Foods and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Foods 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.| US Foods vs. The Chefs Warehouse | US Foods vs. Sysco | US Foods vs. SpartanNash Co | US Foods vs. Calavo Growers |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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