Correlation Between AMCON Distributing and AMFAHI

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

By analyzing existing cross correlation between AMCON Distributing and AMFAHI 2805 11 MAR 31, you can compare the effects of market volatilities on AMCON Distributing and AMFAHI 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 AMFAHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and AMFAHI.

Diversification Opportunities for AMCON Distributing and AMFAHI

-0.5

Correlation Coefficient

AMCON Distributing  AMFAHI

Very good diversification

The 3 months correlation between AMCON and AMFAHI is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and AMFAHI 2805 11 MAR 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMFAHI 2805 11 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 AMFAHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMFAHI 2805 11 has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and AMFAHI go up and down completely randomly.

Pair Corralation between AMCON Distributing and AMFAHI

Considering the 90-day investment horizon AMCON Distributing is expected to generate 3.56 times more return on investment than AMFAHI. However, AMCON Distributing is 3.56 times more volatile than AMFAHI 2805 11 MAR 31. It trades about 0.0 of its potential returns per unit of risk. AMFAHI 2805 11 MAR 31 is currently generating about -0.03 per unit of risk. If you would invest  17,557  in AMCON Distributing on September 13, 2024 and sell it today you would lose (3,957) from holding AMCON Distributing or give up 22.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	28.78%
Values	Daily Returns

AMCON Distributing  vs.  AMFAHI 2805 11 MAR 31

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.

AMFAHI 2805 11

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMFAHI 2805 11 MAR 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for AMFAHI 2805 11 MAR 31 investors.

Pair Trading with AMCON Distributing and AMFAHI

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

The idea behind AMCON Distributing and AMFAHI 2805 11 MAR 31 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.