Correlation Between ENTERPRISE and AMCON Distributing

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

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

Diversification Opportunities for ENTERPRISE and AMCON Distributing

0.08

Correlation Coefficient

ENTERPRISE  AMCON Distributing

Significant diversification

The 3 months correlation between ENTERPRISE and AMCON is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ENTERPRISE PRODS OPER and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and ENTERPRISE 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 ENTERPRISE PRODS OPER 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 ENTERPRISE i.e., ENTERPRISE and AMCON Distributing go up and down completely randomly.

Pair Corralation between ENTERPRISE and AMCON Distributing

Assuming the 90 days trading horizon ENTERPRISE PRODS OPER is expected to generate 0.41 times more return on investment than AMCON Distributing. However, ENTERPRISE PRODS OPER is 2.41 times less risky than AMCON Distributing. It trades about 0.01 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.02 per unit of risk. If you would invest  11,454  in ENTERPRISE PRODS OPER on May 20, 2025 and sell it today you would earn a total of  455.00  from holding ENTERPRISE PRODS OPER or generate 3.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.77%
Values	Daily Returns

ENTERPRISE PRODS OPER  vs.  AMCON Distributing

ENTERPRISE PRODS OPER

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENTERPRISE PRODS OPER are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ENTERPRISE is not utilizing all of its potentials. The recent stock price disturbance, 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 ENTERPRISE and AMCON Distributing

The main advantage of trading using opposite ENTERPRISE and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTERPRISE 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 ENTERPRISE PRODS OPER 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 Stocks Directory module to find actively traded stocks across global markets.