Correlation Between AMCON Distributing and Falcons Beyond

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

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

Diversification Opportunities for AMCON Distributing and Falcons Beyond

0.34

Correlation Coefficient

AMCON Distributing  Falcons Beyond

Weak diversification

The 3 months correlation between AMCON and Falcons is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Falcons Beyond Global, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcons Beyond Global, 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 Falcons Beyond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcons Beyond Global, has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Falcons Beyond go up and down completely randomly.

Pair Corralation between AMCON Distributing and Falcons Beyond

Considering the 90-day investment horizon AMCON Distributing is expected to generate 36.66 times less return on investment than Falcons Beyond. But when comparing it to its historical volatility, AMCON Distributing is 1.86 times less risky than Falcons Beyond. It trades about 0.0 of its potential returns per unit of risk. Falcons Beyond Global, is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  820.00  in Falcons Beyond Global, on October 8, 2024 and sell it today you would lose (28.00) from holding Falcons Beyond Global, or give up 3.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AMCON Distributing  vs.  Falcons Beyond Global,

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Falcons Beyond Global,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Falcons Beyond Global, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Falcons Beyond may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AMCON Distributing and Falcons Beyond

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

The idea behind AMCON Distributing and Falcons Beyond Global, 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.