Correlation Between Artisan Partners and AMCON Distributing

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

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

Diversification Opportunities for Artisan Partners and AMCON Distributing

-0.33

Correlation Coefficient

Artisan Partners  AMCON Distributing

Very good diversification

The 3 months correlation between Artisan and AMCON is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Artisan Partners 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 Artisan Partners Asset 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 Artisan Partners i.e., Artisan Partners and AMCON Distributing go up and down completely randomly.

Pair Corralation between Artisan Partners and AMCON Distributing

Given the investment horizon of 90 days Artisan Partners Asset is expected to under-perform the AMCON Distributing. But the stock apears to be less risky and, when comparing its historical volatility, Artisan Partners Asset is 4.06 times less risky than AMCON Distributing. The stock trades about -0.05 of its potential returns per unit of risk. The AMCON Distributing is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  11,982  in AMCON Distributing on September 18, 2024 and sell it today you would earn a total of  1,624  from holding AMCON Distributing or generate 13.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Artisan Partners Asset  vs.  AMCON Distributing

Artisan Partners Asset

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

AMCON Distributing

Risk-Adjusted Performance

2 of 100

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.

Pair Trading with Artisan Partners and AMCON Distributing

The main advantage of trading using opposite Artisan Partners and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners 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 Artisan Partners Asset 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.