Correlation Between AMCON Distributing and Unum

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

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

Diversification Opportunities for AMCON Distributing and Unum

0.42

Correlation Coefficient

AMCON Distributing  Unum

Very weak diversification

The 3 months correlation between AMCON and Unum is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Unum go up and down completely randomly.

Pair Corralation between AMCON Distributing and Unum

Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Unum. In addition to that, AMCON Distributing is 3.83 times more volatile than Unum Group. It trades about 0.0 of its total potential returns per unit of risk. Unum Group is currently generating about 0.03 per unit of volatility. If you would invest  2,184  in Unum Group on October 17, 2024 and sell it today you would earn a total of  205.00  from holding Unum Group or generate 9.39% return on investment over 90 days.

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

AMCON Distributing  vs.  Unum Group

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.

Unum Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unum Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Unum is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AMCON Distributing and Unum

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

The idea behind AMCON Distributing and Unum Group 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.