Correlation Between AMCON Distributing and Keurig Dr

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

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

Diversification Opportunities for AMCON Distributing and Keurig Dr

0.29

Correlation Coefficient

AMCON Distributing  Keurig Dr

Modest diversification

The 3 months correlation between AMCON and Keurig is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper 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 Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Keurig Dr go up and down completely randomly.

Pair Corralation between AMCON Distributing and Keurig Dr

Considering the 90-day investment horizon AMCON Distributing is not expected to generate positive returns. Moreover, AMCON Distributing is 3.04 times more volatile than Keurig Dr Pepper. It trades away all of its potential returns to assume current level of volatility. Keurig Dr Pepper is currently generating about 0.04 per unit of risk. If you would invest  3,280  in Keurig Dr Pepper on December 17, 2024 and sell it today you would earn a total of  79.00  from holding Keurig Dr Pepper or generate 2.41% return on investment over 90 days.

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

AMCON Distributing  vs.  Keurig Dr Pepper

AMCON Distributing

Risk-Adjusted Performance

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.

Keurig Dr Pepper

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Keurig Dr is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AMCON Distributing and Keurig Dr

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

The idea behind AMCON Distributing and Keurig Dr Pepper 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .