Correlation Between AMCON Distributing and Green Planet

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

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

Diversification Opportunities for AMCON Distributing and Green Planet

-0.09

Correlation Coefficient

AMCON Distributing  Green Planet

Good diversification

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

Pair Corralation between AMCON Distributing and Green Planet

Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Green Planet. But the stock apears to be less risky and, when comparing its historical volatility, AMCON Distributing is 1.14 times less risky than Green Planet. The stock trades about -0.03 of its potential returns per unit of risk. The Green Planet Bio is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Green Planet Bio on October 23, 2024 and sell it today you would earn a total of  14.00  from holding Green Planet Bio or generate 35.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

AMCON Distributing  vs.  Green Planet Bio

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 latest fragile performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Green Planet Bio

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green Planet Bio are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Green Planet sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMCON Distributing and Green Planet

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

The idea behind AMCON Distributing and Green Planet Bio 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..