Correlation Between Snap On and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Snap On 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 Snap On and AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap On and AMCON Distributing, you can compare the effects of market volatilities on Snap On 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 Snap On with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap On and AMCON Distributing.
Diversification Opportunities for Snap On and AMCON Distributing
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and AMCON is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Snap On 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 Snap On 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 Snap On i.e., Snap On and AMCON Distributing go up and down completely randomly.
Pair Corralation between Snap On and AMCON Distributing
Considering the 90-day investment horizon Snap On is expected to generate 0.45 times more return on investment than AMCON Distributing. However, Snap On is 2.23 times less risky than AMCON Distributing. It trades about 0.07 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.0 per unit of risk. If you would invest 21,837 in Snap On on September 26, 2024 and sell it today you would earn a total of 12,706 from holding Snap On or generate 58.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.99% |
Values | Daily Returns |
Snap On vs. AMCON Distributing
Performance |
Timeline |
Snap On |
AMCON Distributing |
Snap On and AMCON Distributing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Snap On and AMCON Distributing
The main advantage of trading using opposite Snap On and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap On 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.Snap On vs. AMCON Distributing | Snap On vs. Espey Mfg Electronics | Snap On vs. Servotronics | Snap On vs. CompX International |
AMCON Distributing vs. Macys Inc | AMCON Distributing vs. Wayfair | AMCON Distributing vs. 1StdibsCom | AMCON Distributing vs. AutoNation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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