Correlation Between Colabor and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Colabor 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 Colabor and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colabor Group and AMCON Distributing, you can compare the effects of market volatilities on Colabor 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 Colabor with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colabor and AMCON Distributing.
Diversification Opportunities for Colabor and AMCON Distributing
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Colabor and AMCON is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Colabor Group and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Colabor 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 Colabor Group 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 Colabor i.e., Colabor and AMCON Distributing go up and down completely randomly.
Pair Corralation between Colabor and AMCON Distributing
Assuming the 90 days horizon Colabor Group is expected to generate 0.6 times more return on investment than AMCON Distributing. However, Colabor Group is 1.66 times less risky than AMCON Distributing. It trades about 0.08 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.02 per unit of risk. If you would invest 65.00 in Colabor Group on December 29, 2024 and sell it today you would earn a total of 7.00 from holding Colabor Group or generate 10.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Colabor Group vs. AMCON Distributing
Performance |
Timeline |
Colabor Group |
AMCON Distributing |
Colabor and AMCON Distributing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Colabor and AMCON Distributing
The main advantage of trading using opposite Colabor and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colabor 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.Colabor vs. Becle SA de | Colabor vs. Naked Wines plc | Colabor vs. Willamette Valley Vineyards | Colabor vs. Fresh Grapes LLC |
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Check out your portfolio center.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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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