Correlation Between Comstock Holding and Ecolab
Can any of the company-specific risk be diversified away by investing in both Comstock Holding and Ecolab 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 Comstock Holding and Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comstock Holding Companies and Ecolab Inc, you can compare the effects of market volatilities on Comstock Holding and Ecolab 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 Comstock Holding with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and Ecolab.
Diversification Opportunities for Comstock Holding and Ecolab
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comstock and Ecolab is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Comstock Holding 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 Comstock Holding Companies are associated (or correlated) with Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Comstock Holding i.e., Comstock Holding and Ecolab go up and down completely randomly.
Pair Corralation between Comstock Holding and Ecolab
Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 3.04 times more return on investment than Ecolab. However, Comstock Holding is 3.04 times more volatile than Ecolab Inc. It trades about 0.05 of its potential returns per unit of risk. Ecolab Inc is currently generating about 0.09 per unit of risk. If you would invest 444.00 in Comstock Holding Companies on September 3, 2024 and sell it today you would earn a total of 372.00 from holding Comstock Holding Companies or generate 83.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comstock Holding Companies vs. Ecolab Inc
Performance |
| Timeline |
| Comstock Holding Com |
| Ecolab Inc |
Comstock Holding and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Holding and Ecolab
The main advantage of trading using opposite Comstock Holding and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Comstock Holding vs. St Joe Company | Comstock Holding vs. Stratus Properties | Comstock Holding vs. Mitsui Fudosan Co | Comstock Holding vs. New World Development |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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