Correlation Between Amazon and AMCON Distributing

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

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

Diversification Opportunities for Amazon and AMCON Distributing

0.19

Correlation Coefficient

Amazon  AMCON Distributing

Average diversification

The 3 months correlation between Amazon and AMCON is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and AMCON Distributing go up and down completely randomly.

Pair Corralation between Amazon and AMCON Distributing

Given the investment horizon of 90 days Amazon Inc is expected to generate 0.75 times more return on investment than AMCON Distributing. However, Amazon Inc is 1.34 times less risky than AMCON Distributing. It trades about -0.03 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.03 per unit of risk. If you would invest  22,635  in Amazon Inc on July 15, 2025 and sell it today you would lose (998.00) from holding Amazon Inc or give up 4.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amazon Inc  vs.  AMCON Distributing

Amazon Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Amazon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

AMCON Distributing

Risk-Adjusted Performance

Weakest

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 Amazon and AMCON Distributing

The main advantage of trading using opposite Amazon and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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 Amazon Inc 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.