Correlation Between Village Super and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Village Super 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 Village Super and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Super Market and AMCON Distributing, you can compare the effects of market volatilities on Village Super 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 Village Super with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Super and AMCON Distributing.
Diversification Opportunities for Village Super and AMCON Distributing
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Village and AMCON is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Village Super 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 Village Super Market 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 Village Super i.e., Village Super and AMCON Distributing go up and down completely randomly.
Pair Corralation between Village Super and AMCON Distributing
Assuming the 90 days horizon Village Super Market is expected to generate 0.67 times more return on investment than AMCON Distributing. However, Village Super Market is 1.5 times less risky than AMCON Distributing. It trades about 0.03 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.02 per unit of risk. If you would invest 3,174 in Village Super Market on August 28, 2024 and sell it today you would earn a total of 67.00 from holding Village Super Market or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Village Super Market vs. AMCON Distributing
Performance |
| Timeline |
| Village Super Market |
| AMCON Distributing |
Village Super and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Super and AMCON Distributing
The main advantage of trading using opposite Village Super and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Super 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.| Village Super vs. Innovative Food Hldg | Village Super vs. Calavo Growers | Village Super vs. The Chefs Warehouse | Village Super vs. AMCON Distributing |
| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Rocky Brands |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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