Correlation Between AMCON Distributing and Hf Foods

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

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

Diversification Opportunities for AMCON Distributing and Hf Foods

0.63

Correlation Coefficient

AMCON Distributing  Hf Foods

Poor diversification

The 3 months correlation between AMCON and HFFG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group and AMCON Distributing 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 AMCON Distributing are associated (or correlated) with Hf Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hf Foods Group has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Hf Foods go up and down completely randomly.

Pair Corralation between AMCON Distributing and Hf Foods

Considering the 90-day investment horizon AMCON Distributing is expected to generate 1.16 times more return on investment than Hf Foods. However, AMCON Distributing is 1.16 times more volatile than Hf Foods Group. It trades about -0.07 of its potential returns per unit of risk. Hf Foods Group is currently generating about -0.09 per unit of risk. If you would invest  19,200  in AMCON Distributing on January 20, 2024 and sell it today you would lose (850.00) from holding AMCON Distributing or give up 4.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

AMCON Distributing  vs.  Hf Foods Group

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 latest unfluctuating performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hf Foods Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hf Foods Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AMCON Distributing and Hf Foods

The main advantage of trading using opposite AMCON Distributing and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing position performs unexpectedly, Hf Foods 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 Hf Foods will offset losses from the drop in Hf Foods' long position.

The idea behind AMCON Distributing and Hf Foods Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.