Correlation Between AMCON Distributing and Tower One

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

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

Diversification Opportunities for AMCON Distributing and Tower One

0.0

Correlation Coefficient

AMCON Distributing  Tower One

Pay attention - limited upside

The 3 months correlation between AMCON and Tower is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Tower One Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower One Wireless 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 Tower One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower One Wireless has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Tower One go up and down completely randomly.

Pair Corralation between AMCON Distributing and Tower One

Considering the 90-day investment horizon AMCON Distributing is expected to generate 103.57 times less return on investment than Tower One. But when comparing it to its historical volatility, AMCON Distributing is 37.81 times less risky than Tower One. It trades about 0.05 of its potential returns per unit of risk. Tower One Wireless is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Tower One Wireless on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Tower One Wireless or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

AMCON Distributing  vs.  Tower One Wireless

AMCON Distributing

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMCON Distributing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward indicators, AMCON Distributing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tower One Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tower One Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Tower One is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AMCON Distributing and Tower One

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

The idea behind AMCON Distributing and Tower One Wireless 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.