Correlation Between AMCON Distributing and Where Food

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

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

Diversification Opportunities for AMCON Distributing and Where Food

0.09

Correlation Coefficient

AMCON Distributing  Where Food

Significant diversification

The 3 months correlation between AMCON and Where is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Where Food go up and down completely randomly.

Pair Corralation between AMCON Distributing and Where Food

Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Where Food. In addition to that, AMCON Distributing is 1.24 times more volatile than Where Food Comes. It trades about -0.02 of its total potential returns per unit of risk. Where Food Comes is currently generating about 0.0 per unit of volatility. If you would invest  1,340  in Where Food Comes on September 15, 2024 and sell it today you would lose (110.00) from holding Where Food Comes or give up 8.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.14%
Values	Daily Returns

AMCON Distributing  vs.  Where Food Comes

AMCON Distributing

Risk-Adjusted Performance

0 of 100

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.

Where Food Comes

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Where Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMCON Distributing and Where Food

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

The idea behind AMCON Distributing and Where Food Comes 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 Commodity Directory module to find actively traded commodities issued by global exchanges.