Correlation Between AMCON Distributing and Ihuman

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

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

Diversification Opportunities for AMCON Distributing and Ihuman

0.22

Correlation Coefficient

AMCON Distributing  Ihuman

Modest diversification

The 3 months correlation between AMCON and Ihuman is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and AMCON Distributing 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 AMCON Distributing are associated (or correlated) with Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Ihuman go up and down completely randomly.

Pair Corralation between AMCON Distributing and Ihuman

Considering the 90-day investment horizon AMCON Distributing is expected to generate 2.15 times more return on investment than Ihuman. However, AMCON Distributing is 2.15 times more volatile than Ihuman Inc. It trades about 0.03 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.14 per unit of risk. If you would invest  13,285  in AMCON Distributing on September 3, 2024 and sell it today you would earn a total of  122.00  from holding AMCON Distributing or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AMCON Distributing  vs.  Ihuman Inc

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Ihuman Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Ihuman is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with AMCON Distributing and Ihuman

The main advantage of trading using opposite AMCON Distributing and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman's long position.

The idea behind AMCON Distributing and Ihuman Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.