Correlation Between BitFuFu Warrant and AMCON Distributing

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

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

Diversification Opportunities for BitFuFu Warrant and AMCON Distributing

0.18

Correlation Coefficient

BitFuFu Warrant  AMCON Distributing

Average diversification

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

Pair Corralation between BitFuFu Warrant and AMCON Distributing

Assuming the 90 days horizon BitFuFu Warrant is expected to generate 2.22 times more return on investment than AMCON Distributing. However, BitFuFu Warrant is 2.22 times more volatile than AMCON Distributing. It trades about 0.04 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.01 per unit of risk. If you would invest  40.00  in BitFuFu Warrant on December 3, 2024 and sell it today you would earn a total of  0.01  from holding BitFuFu Warrant or generate 0.02% return on investment over 90 days.

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

BitFuFu Warrant  vs.  AMCON Distributing

BitFuFu Warrant

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Warrant are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BitFuFu Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with BitFuFu Warrant and AMCON Distributing

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

The idea behind BitFuFu Warrant and AMCON Distributing 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.