Correlation Between Alpha Cognition and AMCON Distributing

Can any of the company-specific risk be diversified away by investing in both Alpha Cognition 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 Alpha Cognition and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alpha Cognition Common and AMCON Distributing, you can compare the effects of market volatilities on Alpha Cognition 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 Alpha Cognition with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Cognition and AMCON Distributing.

Diversification Opportunities for Alpha Cognition and AMCON Distributing

-0.12

Correlation Coefficient

Alpha Cognition  AMCON Distributing

Good diversification

The 3 months correlation between Alpha and AMCON is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Cognition Common and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Alpha Cognition 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 Alpha Cognition Common 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 Alpha Cognition i.e., Alpha Cognition and AMCON Distributing go up and down completely randomly.

Pair Corralation between Alpha Cognition and AMCON Distributing

Given the investment horizon of 90 days Alpha Cognition Common is expected to under-perform the AMCON Distributing. In addition to that, Alpha Cognition is 2.02 times more volatile than AMCON Distributing. It trades about -0.07 of its total potential returns per unit of risk. AMCON Distributing is currently generating about 0.11 per unit of volatility. If you would invest  12,795  in AMCON Distributing on September 25, 2024 and sell it today you would earn a total of  805.00  from holding AMCON Distributing or generate 6.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Alpha Cognition Common  vs.  AMCON Distributing

Alpha Cognition Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Cognition Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AMCON Distributing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMCON Distributing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, AMCON Distributing is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alpha Cognition and AMCON Distributing

The main advantage of trading using opposite Alpha Cognition and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Cognition 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.

The idea behind Alpha Cognition Common and AMCON Distributing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.