Correlation Between AMCON Distributing and Zapata Computing

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

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

Diversification Opportunities for AMCON Distributing and Zapata Computing

0.22

Correlation Coefficient

AMCON Distributing  Zapata Computing

Modest diversification

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

Pair Corralation between AMCON Distributing and Zapata Computing

Considering the 90-day investment horizon AMCON Distributing is expected to generate 0.17 times more return on investment than Zapata Computing. However, AMCON Distributing is 5.84 times less risky than Zapata Computing. It trades about 0.04 of its potential returns per unit of risk. Zapata Computing Holdings is currently generating about -0.28 per unit of risk. If you would invest  13,402  in AMCON Distributing on September 18, 2024 and sell it today you would earn a total of  600.00  from holding AMCON Distributing or generate 4.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	54.84%
Values	Daily Returns

AMCON Distributing  vs.  Zapata Computing Holdings

AMCON Distributing

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMCON Distributing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward indicators, AMCON Distributing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Zapata Computing Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zapata Computing Holdings 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 somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AMCON Distributing and Zapata Computing

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

The idea behind AMCON Distributing and Zapata Computing Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.