Correlation Between Intelligent Group and AMCON Distributing

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

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

Diversification Opportunities for Intelligent Group and AMCON Distributing

0.22

Correlation Coefficient

Intelligent Group  AMCON Distributing

Modest diversification

The 3 months correlation between Intelligent and AMCON is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Group Limited and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Intelligent Group 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 Intelligent Group Limited 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 Intelligent Group i.e., Intelligent Group and AMCON Distributing go up and down completely randomly.

Pair Corralation between Intelligent Group and AMCON Distributing

Given the investment horizon of 90 days Intelligent Group Limited is expected to under-perform the AMCON Distributing. In addition to that, Intelligent Group is 1.92 times more volatile than AMCON Distributing. It trades about -0.07 of its total potential returns per unit of risk. AMCON Distributing is currently generating about 0.0 per unit of volatility. If you would invest  16,700  in AMCON Distributing on October 11, 2024 and sell it today you would lose (3,698) from holding AMCON Distributing or give up 22.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	41.63%
Values	Daily Returns

Intelligent Group Limited  vs.  AMCON Distributing

Intelligent Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Intelligent Group is not utilizing all of its potentials. The newest stock price chaos, may contribute to medium-term losses for the stakeholders.

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.

Pair Trading with Intelligent Group and AMCON Distributing

The main advantage of trading using opposite Intelligent Group and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelligent Group 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 Intelligent Group Limited 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.