Correlation Between INTNED and AMCON Distributing

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

By analyzing existing cross correlation between INTNED 4625 06 JAN 26 and AMCON Distributing, you can compare the effects of market volatilities on INTNED 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 INTNED with a short position of AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and AMCON Distributing.

Diversification Opportunities for INTNED and AMCON Distributing

0.03

Correlation Coefficient

INTNED  AMCON Distributing

Significant diversification

The 3 months correlation between INTNED and AMCON is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 4625 06 JAN 26 and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and INTNED 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 INTNED 4625 06 JAN 26 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 INTNED i.e., INTNED and AMCON Distributing go up and down completely randomly.

Pair Corralation between INTNED and AMCON Distributing

Assuming the 90 days trading horizon INTNED 4625 06 JAN 26 is expected to under-perform the AMCON Distributing. But the bond apears to be less risky and, when comparing its historical volatility, INTNED 4625 06 JAN 26 is 6.45 times less risky than AMCON Distributing. The bond trades about -0.24 of its potential returns per unit of risk. The AMCON Distributing is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  12,103  in AMCON Distributing on September 21, 2024 and sell it today you would earn a total of  1,600  from holding AMCON Distributing or generate 13.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	59.09%
Values	Daily Returns

INTNED 4625 06 JAN 26  vs.  AMCON Distributing

INTNED 4625 06

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 4625 06 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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

Pair Trading with INTNED and AMCON Distributing

The main advantage of trading using opposite INTNED and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED 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 INTNED 4625 06 JAN 26 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.