Correlation Between AMCON Distributing and Sweetgreen

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

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

Diversification Opportunities for AMCON Distributing and Sweetgreen

-0.31

Correlation Coefficient

AMCON Distributing  Sweetgreen

Very good diversification

The 3 months correlation between AMCON and Sweetgreen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen 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 Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Sweetgreen go up and down completely randomly.

Pair Corralation between AMCON Distributing and Sweetgreen

Considering the 90-day investment horizon AMCON Distributing is expected to generate 0.65 times more return on investment than Sweetgreen. However, AMCON Distributing is 1.53 times less risky than Sweetgreen. It trades about 0.19 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.08 per unit of risk. If you would invest  11,982  in AMCON Distributing on September 19, 2024 and sell it today you would earn a total of  1,618  from holding AMCON Distributing or generate 13.5% 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.  Sweetgreen

AMCON Distributing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMCON Distributing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Sweetgreen

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Sweetgreen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AMCON Distributing and Sweetgreen

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

The idea behind AMCON Distributing and Sweetgreen 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 .