Correlation Between SunCar Technology and AMCON Distributing

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

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

Diversification Opportunities for SunCar Technology and AMCON Distributing

0.01

Correlation Coefficient

SunCar Technology  AMCON Distributing

Significant diversification

The 3 months correlation between SunCar and AMCON is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SunCar Technology Group and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and SunCar Technology 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 SunCar Technology Group 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 SunCar Technology i.e., SunCar Technology and AMCON Distributing go up and down completely randomly.

Pair Corralation between SunCar Technology and AMCON Distributing

Assuming the 90 days horizon SunCar Technology Group is expected to under-perform the AMCON Distributing. In addition to that, SunCar Technology is 2.35 times more volatile than AMCON Distributing. It trades about -0.01 of its total potential returns per unit of risk. AMCON Distributing is currently generating about -0.02 per unit of volatility. If you would invest  13,158  in AMCON Distributing on December 28, 2024 and sell it today you would lose (1,267) from holding AMCON Distributing or give up 9.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.67%
Values	Daily Returns

SunCar Technology Group  vs.  AMCON Distributing

SunCar Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days SunCar Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SunCar Technology and AMCON Distributing

The main advantage of trading using opposite SunCar Technology and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunCar Technology 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 SunCar Technology Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.