Correlation Between LandBridge Company and AMCON Distributing

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

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

Diversification Opportunities for LandBridge Company and AMCON Distributing

-0.47

Correlation Coefficient

LandBridge Company  AMCON Distributing

Very good diversification

The 3 months correlation between LandBridge and AMCON is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding LandBridge Company LLC and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and LandBridge Company 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 LandBridge Company LLC 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 LandBridge Company i.e., LandBridge Company and AMCON Distributing go up and down completely randomly.

Pair Corralation between LandBridge Company and AMCON Distributing

Allowing for the 90-day total investment horizon LandBridge Company LLC is expected to generate 1.17 times more return on investment than AMCON Distributing. However, LandBridge Company is 1.17 times more volatile than AMCON Distributing. It trades about 0.08 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.02 per unit of risk. If you would invest  6,511  in LandBridge Company LLC on December 29, 2024 and sell it today you would earn a total of  1,115  from holding LandBridge Company LLC or generate 17.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

LandBridge Company LLC  vs.  AMCON Distributing

LandBridge Company

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LandBridge Company LLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, LandBridge Company sustained 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 LandBridge Company and AMCON Distributing

The main advantage of trading using opposite LandBridge Company and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LandBridge Company 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 LandBridge Company LLC 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 Transaction History module to view history of all your transactions and understand their impact on performance.