Correlation Between AMCON Distributing and Richtech Robotics

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

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

Diversification Opportunities for AMCON Distributing and Richtech Robotics

-0.39

Correlation Coefficient

AMCON Distributing  Richtech Robotics

Very good diversification

The 3 months correlation between AMCON and Richtech is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Richtech Robotics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richtech Robotics Class 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 Richtech Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richtech Robotics Class has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Richtech Robotics go up and down completely randomly.

Pair Corralation between AMCON Distributing and Richtech Robotics

Considering the 90-day investment horizon AMCON Distributing is expected to generate 0.58 times more return on investment than Richtech Robotics. However, AMCON Distributing is 1.72 times less risky than Richtech Robotics. It trades about 0.07 of its potential returns per unit of risk. Richtech Robotics Class is currently generating about -0.14 per unit of risk. If you would invest  12,735  in AMCON Distributing on December 4, 2024 and sell it today you would earn a total of  745.00  from holding AMCON Distributing or generate 5.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AMCON Distributing  vs.  Richtech Robotics Class

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.

Richtech Robotics Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Richtech Robotics Class are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Richtech Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMCON Distributing and Richtech Robotics

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

The idea behind AMCON Distributing and Richtech Robotics Class 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.