Correlation Between AMCON Distributing and Marimaca Copper

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

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

Diversification Opportunities for AMCON Distributing and Marimaca Copper

-0.18

Correlation Coefficient

AMCON Distributing  Marimaca Copper

Good diversification

The 3 months correlation between AMCON and Marimaca is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp 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 Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Marimaca Copper go up and down completely randomly.

Pair Corralation between AMCON Distributing and Marimaca Copper

Considering the 90-day investment horizon AMCON Distributing is expected to generate 221.5 times less return on investment than Marimaca Copper. But when comparing it to its historical volatility, AMCON Distributing is 1.14 times less risky than Marimaca Copper. It trades about 0.0 of its potential returns per unit of risk. Marimaca Copper Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Marimaca Copper Corp on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Marimaca Copper Corp or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.99%
Values	Daily Returns

AMCON Distributing  vs.  Marimaca Copper Corp

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.

Marimaca Copper Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Marimaca Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMCON Distributing and Marimaca Copper

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

The idea behind AMCON Distributing and Marimaca Copper Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.