Correlation Between Black Stone and Comstock Resources
Can any of the company-specific risk be diversified away by investing in both Black Stone and Comstock Resources 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 Black Stone and Comstock Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Stone Minerals and Comstock Resources, you can compare the effects of market volatilities on Black Stone and Comstock Resources 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 Black Stone with a short position of Comstock Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Stone and Comstock Resources.
Diversification Opportunities for Black Stone and Comstock Resources
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Black and Comstock is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Black Stone Minerals and Comstock Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Resources and Black Stone 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 Black Stone Minerals are associated (or correlated) with Comstock Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Resources has no effect on the direction of Black Stone i.e., Black Stone and Comstock Resources go up and down completely randomly.
Pair Corralation between Black Stone and Comstock Resources
Considering the 90-day investment horizon Black Stone Minerals is expected to under-perform the Comstock Resources. But the stock apears to be less risky and, when comparing its historical volatility, Black Stone Minerals is 2.87 times less risky than Comstock Resources. The stock trades about -0.11 of its potential returns per unit of risk. The Comstock Resources is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,424 in Comstock Resources on September 12, 2024 and sell it today you would earn a total of 266.00 from holding Comstock Resources or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Stone Minerals vs. Comstock Resources
Performance |
| Timeline |
| Black Stone Minerals |
| Comstock Resources |
Black Stone and Comstock Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Stone and Comstock Resources
The main advantage of trading using opposite Black Stone and Comstock Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Stone position performs unexpectedly, Comstock Resources 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 Comstock Resources will offset losses from the drop in Comstock Resources' long position.| Black Stone vs. Dorchester Minerals LP | Black Stone vs. Sitio Royalties Corp | Black Stone vs. MV Oil Trust | Black Stone vs. VOC Energy Trust |
| Comstock Resources vs. Range Resources Corp | Comstock Resources vs. Permian Resources | Comstock Resources vs. EQT Corporation | Comstock Resources vs. Vital Energy |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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